AGOLF, LLC v. Village of Arlington Heights ( 2011 )

FIFTH DIVISION
April 15, 2011
No. 1-10-1599
AGOLF, LLC, an Illinois Limited Liability Company, ) Appeal from the
) Circuit Court of
Plaintiff-Appellant, ) Cook County.
)
v. ) No. 06 CH 18560
)
THE VILLAGE OF ARLINGTON HEIGHTS, )
a Municipal Corporation, ) The Honorable
) Nancy J. Arnold,
Defendant-Appellee. ) Judge Presiding.
PRESIDING JUSTICE FITZGERALD SMITH delivered the judgment of the court, with
opinion.
Justices Joseph Gordon and Howse concurred in the judgment and opinion.
OPINION
Plaintiff-appellant Agolf, LLC, an Illinois limited liability company (plaintiff), brought suit
against defendant-appellee the Village of Arlington Heights, a municipal corporation (defendant),
seeking declaratory judgment and injunctive relief involving a redevelopment project. It later filed
an amended complaint which added constitutional claims. Defendant moved for summary
judgment based on res judicata, and the trial court granted its motion. Plaintiff appeals,
contending that the trial court erred in granting summary judgment on the ground of res judicata
because that doctrine was inapplicable and inequitable in the instant cause. Plaintiff asks that we
No. 1-10-1599
reverse the trial court's grant of summary judgment in whole or, alternatively, that we reverse it at
least as to the constitutional claims it asserted in its amended complaint, and that we remand the
cause for further consideration on the merits. For the following reasons, we affirm.
BACKGROUND
Defendant implements a TIF district.
Plaintiff purchased International Plaza (the Plaza) shopping center in 1995, near the
intersection of Arlington Heights Road and Golf Road in Arlington Heights, Illinois. Surrounding
the Plaza were several commercial lots, single-family homes, businesses, residential lots, and a gas
station; some of these were occupied while others had been abandoned. Also, southwest of the
Plaza sat a small shopping center operated by Arlin-Golf, LLC (Arlin-Golf). Over the years,
plaintiff negotiated multiple leases with several tenants for the occupation of space in its Plaza,
among them Capital Fitness of Arlington Heights, Inc. (Capital Fitness), which operated a health
club. Capital Fitness’s lease with plaintiff at the Plaza was for 11 years commencing in 1997, with
options to renew until August 2016.
In January 2002, defendant announced that it would be implementing a tax increment
financing (TIF) district as part of a redevelopment project. The plan for this project targeted the
redevelopment of a substantial area around Arlington Heights Road and Golf Road and included
the property on which the Plaza sat, as well as the property to the southwest owned by Arlin-
Golf. Defendant designated and implemented the TIF district via ordinance on July 1, 2002.
Capital Fitness brings suit.
Immediately thereafter, in July 2002, Capital Fitness filed a two-count cause of action
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against defendant, seeking an injunction and declaratory judgment. See Capital Fitness of
Arlington Heights, Inc. v. Village of Arlington Heights, 394 Ill. App. 3d 913, 917 (2009). It
requested an order prohibiting defendant from using its powers to condemn the property under
the Tax Increment Allocation Redevelopment Act (Act) (65 ILCS 5/11-74.4-1 et seq. (West
2002)), a declaration that the designation of the redevelopment project area was invalid, a
declaration that the Plaza should not be included in the project, and damages. Following the filing
of a first amended complaint, the trial court entered an order dismissing count I of Capital
Fitness’s complaint (for injunctive relief), but allowed count II (for declaratory judgment) to
proceed. Capital Fitness eventually filed a second amended complaint, alleging that the
redevelopment project area did not meet the requirements for the implementation of a TIF plan,
that defendant failed to demonstrate that the project area was not subject to growth, and that
defendant’s plan was improper. See Capital Fitness, 394 Ill. App. 3d at 918.
The cause proceeded to trial in 2006, during which some 14 witnesses testified regarding
the project, its planning, and the land in question. See Capital Fitness, 394 Ill. App. 3d at 918.
Among those who testified on behalf of Capital Fitness in its suit against defendant was Su-Chuan
Hsu, plaintiff’s president and manager of the Plaza. She testified regarding the financial condition
of the Plaza, including its revenues, occupancies, rents, property tax increases, and the equalized
assessed value of the land. She averred that she, and a representative that she had hired, attended
several public meetings concerning defendant's TIF plan and ordinance, including a village board
meeting in early March 2002, a joint review board meeting in late March 2002, and a
redevelopment commission meeting in April 2002. Hsu stated that her representative, with her
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authority, spoke at these meetings against the TIF district. She further testified that in May 2002,
she hired a lawyer and that the two of them, along with his partner, attended a village board
meeting in June 2002 during which they made statements regarding, again, the financial condition
of the Plaza and their opposition to defendant's plan. Finally, Hsu testified that plaintiff had
recently filed suit against defendant over the TIF district and that plaintiff's suit, just as Capital
Fitness's suit against defendant, sought to declare the TIF district invalid.
After a lengthy examination of Capital Fitness’s allegations, the Act’s statutory factors and
the evidence presented, the trial court, in January 2007, found that Capital Fitness had not met its
burden in its cause, that defendant had not abused its discretion in designating the Plaza as part of
its redevelopment plan, and that defendant's project complied with all necessary requirements.
Therefore, the trial court denied Capital Fitness’s request for declaratory judgment, holding that
the TIF ordinance implemented by defendant was proper. See Capital Fitness, 394 Ill. App. 3d at
918.
Capital Fitness appealed its cause to our court. In a decision issued in September 2009,
we affirmed the trial court. See Capital Fitness, 394 Ill. App. 3d at 935. Again, after reviewing
the Act, its factors and the pertinent evidence regarding the land involved, we found that Capital
Fitness had failed to establish that defendant had abused its discretion in any way. Specifically, we
addressed the land on which the Plaza sat in relation to statutory blighting factors relevant to
improved areas, including obsolescense, deterioration, excessive vacancies, inadequate utilities,
deleterious land use or layout, and lack of community planning; statutory blighting factors
relevant to vacant areas; and conformance with defendant’s project plan. See Capital Fitness,
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394 Ill. App. 3d at 920-35. Following this examination, we held that the trial court’s decision
denying Capital Fitness’ request for declaratory judgment, and instead holding for defendant, was
not against the manifest weight of the evidence. See Capital Fitness, 394 Ill. App. 3d at 921-22.
Capital Fitness sought review of our decision in the Illinois Supreme Court, which denied
its appeal. See Capital Fitness Arlington Heights, Inc. v. Village of Arlington Heights, 234 Ill.
2d 518 (2009).
Arlin-Golf also files suit.
Meanwhile, in 2006, while Capital Fitness’ cause against defendant was pending, Arlin-
Golf, owner of the shopping center southwest of plaintiff's Plaza, also filed suit against defendant
in Illinois state court. See Arlin-Golf, LLC v. The Village of Arlington Heights, 631 F.3d 818(7th Cir. 2011). As Capital Fitness' suit, Arlin-Golf's suit, too, alleged that defendant’s
implementation of the TIF district was improper under the Act. It also claimed that defendant had
violated the Illinois constitution by committing an improper taking. In September 2008, Arlin-
Golf voluntarily dismissed its suit with prejudice. However, in 2009, Arlin-Golf sued defendant in
federal court via a 10-count complaint, alleging that defendant’s conduct caused Arlin-Golf to
suffer financial losses. Defendant filed a motion to dismiss based on res judicata in relation to
Arlin-Golf's prior state suit, and the district court granted its motion. Arlin-Golf appealed. See
Arlin-Golf, 631 F.3d at 819-20.
Following a thorough review of the doctrine of res judicata, the Arlin-Golf court affirmed
the judgment of the district court in favor of defendant. See Arlin-Golf, 631 F.3d at 821-22.
Specifically, applying Illinois law, it concluded that Arlin-Golf’s federal suit was barred by its
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No. 1-10-1599
prior state suit because, not only were the same parties and their privies involved, but also both
causes relied on the same operative facts–defendant’s implementation of the TIF district. See
Arlin-Golf, 631 F.3d at 821-22. 1
Plaintiff files suit against defendant.
Meanwhile, amidst the pendency of all this litigation, plaintiff brought suit against
defendant in September 2006. In its two-count complaint, plaintiff sought an injunction to
prevent defendant from implementing the TIF district and its project, and a declaratory judgment
that defendant’s plan violated the Act. Plaintiff alleged that certain requisites set out in the Act
were not present within the land which would render a TIF district proper, i.e., obsolescense,
excessive vacancies, deleterious land use or layout, lack of community planning, deterioration,
and inadequate utilities. Plaintiff also alleged that the requisites for “blight” under the Act were
1
We note for the record that during the pendency of the instant appeal, defendant filed a
motion to cite Arlin-Golf as additional authority in support of its arguments herein regarding res
judicata. Plaintiff, meanwhile, filed a response stating that Arlin-Golf did not provide such
support because it did not deal with the element of res judicata at issue: privity. Upon
consideration of plaintiff’s response, we granted defendant’s motion. Plaintiff is correct that the
main issue in Arlin-Golf was not privity (because the plaintiff in the state and federal cases was
the same, i.e., Arlin-Golf) but, rather, whether there was an identity between the causes of action
(i.e., between Arlin-Golf’s state claim against defendant and its federal claim against defendant).
However, because the facts in Arlin-Golf are so closely related to the facts in the instant cause,
we find that the references we have made to it herein are appropriate.
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No. 1-10-1599
not present, that application of the Act to the land in question was improper, and that defendant’s
plan did not conform to its overall comprehensive plan for the area. In November 2007, plaintiff
filed an amended complaint. To its original two counts, plaintiff added two constitutional claims,
namely, that the Act was unconstitutionally vague on its face and that the Act was
unconstitutional as it was applied in this cause.
Due to the pendency of Capital Fitness’s litigation against defendant, a stay was ordered in
plaintiff’s case. However, following the resolution of Capital Fitness's cause which declared
defendant’s TIF district valid, defendant filed a motion in the trial court for summary judgment
against plaintiff in the instant cause based on res judicata. In its motion, defendant asserted that
plaintiff’s amended complaint presented the same allegations as Capital Fitness's second amended
complaint in its suit against defendant, which had challenged the designation of the TIF project
area and defendant’s failure to meet the statutory requirements of the Act. Defendant attached to
its motion a copy of plaintiff's and Capital Fitness's complaints and argued that both were identical
in their factual and legal assertions against defendant.
In May 2010, in a written memorandum following hearings on the matter, the trial court
granted summary judgment in favor of defendant and against plaintiff. Regarding plaintiff’s
original two counts for injunctive relief and declaratory judgment, the court determined that
plaintiff and defendant agreed that a final judgment on the merits of these issues existed in Capital
Fitness, and that the causes of action in Capital Fitness and in the instant cause were identical.
Therefore, the court noted that the only question was whether there was an identity of parties or
their privies in these two suits; while defendant had argued that there was, plaintiff had argued
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No. 1-10-1599
that there was not because it was the landlord of the Plaza while Capital Fitness was merely a
tenant which did not share the same interest in the land. Citing Board of Education of Sunset
Ridge School District No. 29 v. Village of Northbrook, 295 Ill. App. 3d 909 (1998), the trial
court disagreed with plaintiff, finding that because both it and Capital Fitness had an interest in
resisting the TIF project as unwarranted, “[t]heir legal interest in the controversy is identical.”
The court concluded that, due to its privity with Capital Fitness, plaintiff’s requests for injunctive
relief and declaratory judgment were barred by res judicata.
Then, the court turned to the two constitutional counts, which plaintiff had added in its
amended complaint. At trial, the following exchange took place:
"THE COURT: *** You make no argument today about your added
counts on Count I and II, which [are] your late added counts, which seek[ ] to
challenge the constitutionality of the TIF statute on its whole. You agree with
counsel that the [Illinois] Supreme Court has already ruled on it?
[Plaintiff's Counsel]: I think that the issue in – I don't concede that.
THE COURT: You don't.
[Plaintiff's Counsel]: The issue under res judicata is whether it is – under
the transactional test, whether it is an identical issue, and the constitutionality is a
different issue. ***
THE COURT: Well, I read your count[s], and [they are] based *** exactly
on the allegation *** that the statute is vague ***.
[Plaintiff's Counsel]: Right. In other -- I mean, the theory of the cause of
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No. 1-10-1599
action in which to challenge the TIF arises from the same operative facts, if that's
the point that the Court is making. But, I mean, you could plead a different legal
theory based upon certain facts. But it is – It is based –
THE COURT: Counsel raised in his motion for summary judgment that
your constitutional claims are barred already by the – or have no merit because of
the Supreme Court ruling that has already upheld the TIF statute [in People ex rel.
City of Canton v. Crouch, 79 Ill. 2d 356 (1980)].
[Plaintiff's Counsel]: I understand.
THE COURT: So you're conceding that?
[Plaintiff's Counsel]: I am conceding that that case has been decided by the
Illinois Supreme Court and it is good law."
No other mention was made at the hearings regarding plaintiff's constitutionality counts. In its
written memorandum, the trial court found that plaintiff had “conceded” during trial, via the
exchange cited, that the constitutionality of the Act, both facially and as applied, had already been
decided by Crouch, and, thus, it did not need to address those issues therein. Accordingly, the
trial court entered summary judgment in favor of defendant and against plaintiff on all counts of
plaintiff’s amended complaint.
ANALYSIS
On appeal, plaintiff primarily contends that the trial court erred in determining that res
judicata applied in the instant cause to bar the counts in its original complaint for injunctive relief
and declaratory judgment against defendant. In addition, plaintiff makes the alternative
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contention that, even if res judicata did apply to bar those counts, the trial court erred in
dismissing its two amended counts regarding the constitutionality of the Act based on an alleged
concession plaintiff made at trial.
We begin by setting forth the applicable standard of review. As noted, the trial court
entered summary judgment in favor of defendant upon its motion, and against plaintiff, on all
counts of plaintiff's amended complaint. Accordingly, this included both plaintiff's original counts
for injunctive relief and declaratory judgment, and its added counts asserting constitutional (facial
and as-applied) vagueness of the Act. Summary judgment is proper when the pleadings,
affidavits, depositions and admissions of record, construed strictly against the moving party, show
that there is no genuine issue as to any material fact and that the moving party is entitled to
judgment as a matter of law. See Morris v. Margulis, 197 Ill. 2d 28, 35 (2001); accord Purtill v.
Hess, 111 Ill. 2d 229, 240-44 (1986); Zakoff v. Chicago Transit Authority, 336 Ill. App. 3d 415,
420 (2002). While this relief has been called a "drastic measure," it is an appropriate tool to
employ in the expeditious disposition of a lawsuit in which " 'the right of the moving party is clear
and free from doubt.' " Morris, 197 Ill. 2d at 35 (quoting Purtill, 111 Ill. 2d at 240). Appellate
review of a trial court's grant of summary judgment is de novo (see Rich v. Principal Life
Insurance Co., 226 Ill. 2d 359, 370 (2007); accord Outboard Marine Corp. v. Liberty Mutual
Insurance Co., 154 Ill. 2d 90, 102 (1992); Zakoff, 336 Ill. App. 3d at 420), and reversal will
occur only if we find that a genuine issue of material fact exists (see Addison v. Whittenberg, 124
Ill. 2d 287, 294 (1988)). In addition, applicable to the instant cause, we note that the issue of
whether a claim is barred by res judicata comprises a question of law, which also mandates de
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No. 1-10-1599
novo review by our court. See Matejczyk v. City of Chicago, 397 Ill. App. 3d 1, 7 (2009).
Turning first to the original counts of its complaint against defendant, plaintiff contends
that the trial court erred in applying res judicata to bar these based on the holding reached in
Capital Fitness. Plaintiff argues that res judicata was not applicable in the instant cause because
the element of privity did not exist between plaintiff in this suit against defendant and Capital
Fitness in its suit against defendant. Essentially, plaintiff asserts that, as the landlord of the Plaza,
its interests with respect to defendant's TIF project were in no way identical or even similar to
Capital Fitness's interests as a mere tenant, and, thus, its distinct suit should have been allowed to
proceed. We disagree.
The doctrine of res judicata provides that a final judgment on the merits rendered by a
court of competent jurisdiction is conclusive as to the rights of the parties and their privies to a
lawsuit and, thus, acts as an absolute bar to a subsequent action between the same parties or their
privies involving the same claim, demand or cause of action. See Nowak v. St. Rita High School,
197 Ill. 2d 381, 389 (2001); Green v. Northwest Community Hospital, 401 Ill. App. 3d 152, 154
(2010) (this equitable doctrine was intended to prevent multiple lawsuits between the same parties
where the facts and issues presented are the same); accord Leow v. A&B Freight Line, Inc., 175
Ill. 2d 176, 180 (1997) (adjudication on merits bars subsequent actions raising same claims or
demands and involving same parties or privies). Res judicata applies when all three of its
elements exist, namely: "(1) there was a final judgment on the merits rendered by a court of
competent jurisdiction, (2) there is an identity of cause of action, and (3) there is an identity of
parties or their privies." Nowak, 197 Ill. 2d at 390; accord Matejczyk, 397 Ill. App. 3d at 3;
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No. 1-10-1599
Purmal v. Robert N. Wadington & Associates, 354 Ill. App. 3d 715, 722 (2004). Once res
judicata is established, its bar extends to all matters that were offered to sustain or defeat the
claim or demand, as well as to any and all other matters which may have or could have been
offered for that purpose. See Nowak, 197 Ill. 2d at 389; Matejczyk, 397 Ill. App. 3d at 3 (bar
applies to what was actually decided and what could have been decided); accord Purmal, 354 Ill.
App. 3d at 722. Accordingly, while it is true that every plaintiff is entitled to his day in court and
res judicata should not be applied to create fundamental unfairness (see, e.g., Nowak, 197 Ill. 2d
at 390), the critical nature of this doctrine operates to prevent repetitive lawsuits and protects
parties from being forced to bear the burden of relitigating essentially the same claim over and
over (see Matejczyk, 397 Ill. App. 3d at 9).
The parties agree that the first two elements of res judicata exist between Capital Fitness's
suit against defendant and plaintiff's suit against defendant. That is, plaintiff here does not assert
that there was not a final judgment on the merits rendered by a court of competent jurisdiction or
that there is not an identity of the causes of action. Indeed, Capital Fitness's case resulted in a
final judgment on the merits. Capital Fitness filed suit in July 2002, the same month in which
defendant implemented the TIF district via ordinance. The cause proceeded to trial in 2006, over
a dozen witnesses testified (including plaintiff's president), and the trial court held that defendant's
TIF ordinance was proper. See Capital Fitness, 394 Ill. App. 3d at 917-18. Capital Fitness then
appealed, our court affirmed the trial court's decision (see Capital Fitness, 394 Ill. App. 3d at
935), and our supreme court denied any further review (234 Ill. 2d 518).
Moreover, an identity of cause of action is clearly apparent. Separate claims are
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No. 1-10-1599
considered the same cause of action under res judicata if they arise from a single group of
operative facts. See River Park, Inc. v. City of Highland Park, 184 Ill. 2d 290, 314 (1998) (this
test, known as the transactional test, applies regardless of whether different legal theories are
asserted); accord Lane v. Kalcheim, 394 Ill. App. 3d 324, 332 (2009) (as long as the claims arise
from the same transaction, this element of res judicata is met even if there is not a substantial
overlap of evidence in the cases). Both Capital Fitness's suit against defendant and plaintiff's suit
against defendant challenged defendant's enactment of the TIF district and its redevelopment
project in relation to the Plaza. Interestingly, Capital Fitness and plaintiff presented identical
allegations in their complaints; not only were they both seeking injunctions and the same
declaratory relief (i.e., a declaration that the project and district were invalid), but both also
alleged that defendant violated the same statutory factors regarding blighting and nonconformance
with the project plan. A comparison of these complaints, as found in the record, supports this
conclusion. These lawsuits, then, clearly arose from the same single group of operative facts and,
thus, there is an identity between Capital Fitness and plaintiff's causes of action against defendant.
The element of res judicata that plaintiff insists on appeal is lacking, and therefore renders
the doctrine inapplicable, is an identity of parties or their privies. Again, plaintiff asserts that,
because it was the landlord of the Plaza and because Capital Fitness was only a tenant of the
Plaza, their interests in the TIF litigation against defendant were not the same.
In order to be bound by a prior judgment in an action where it was not a party, the party in
the subsequent lawsuit must have been in privity with one of the parties in the prior lawsuit. See
Holzer v. Motorola Lighting, Inc., 295 Ill. App. 3d 963, 972 (1998). Privity does not require that
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No. 1-10-1599
all the same parties are involved; rather, instead of the identity of the parties, this element focuses
on the interests of the parties in question. See Purmal, 354 Ill. App. 3d at 722-23. A
determination regarding whether privity exists is to be conducted on a case-by-case basis. See In
re Liquidation of Legion Indemnity Corp., 373 Ill. App. 3d 969, 977 (2007); see also Purmal,
354 Ill. App. 3d at 722 (there is no general or automatic definition of "privity" and, instead, each
case's circumstances must be evaluated).
"Privity expresses the idea that as to certain matters and in certain circumstances persons
who are not parties to an action but who are connected with it in their interests are affected by the
judgment with reference to interests involved in the action, as if they were parties." (Internal
quotation marks omitted.) City of Chicago v. St. John's United Church of Christ, 404 Ill. App.
3d 505, 513 (2010) (quoting Purmal, 354 Ill. App. 3d at 722-23, quoting Restatement of
Judgments §83, cmt. a (1942)). Simply put, privity exists between a party to the prior suit and a
nonparty when the party to the prior suit “adequately represent[ed] the same legal interests” of
the nonparty. (Internal quotation marks omitted.) People ex rel. Burris v. Progressive Land
Developers, Inc., 151 Ill. 2d 285, 296 (1992). And, more specific to the instant cause, privity
clearly exists between parties who share a mutual or successive relationship in property rights that
were the subject of an earlier action. See Board of Education of Sunset Ridge School District
No. 29 v. Village of Northbrook, 295 Ill. App. 3d 909, 919 (1998); see also St. John's, 404 Ill.
App. 3d at 513. Ultimately, a nonparty to a prior suit may be bound pursuant to privity if its
interests "are so closely aligned to those of a party" in that prior suit that the party was,
essentially, a virtual representative of the nonparty. Purmal, 354 Ill. App. 3d at 723; accord St.
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John's, 404 Ill. App. 3d at 513; see also City of Rockford v. Unit Six of the Policemen's
Benevolent & Protective Ass'n, 362 Ill. App. 3d 556, 563 (2005).
Upon our examination of the facts at hand, we find that there was privity between Capital
Fitness, the party in the prior suit, and plaintiff, the nonparty. First, Capital Fitness and plaintiff
shared the same legal interest in their respective lawsuits against defendant. Capital Fitness
sought injunctive relief and a declaratory judgment to prevent defendant from incorporating the
Plaza in its TIF district and redevelopment plan. This was the exact same relief plaintiff sought in
its suit against defendant. Next, it is clear to us that Capital Fitness adequately represented this
shared legal interest. As we noted earlier, Capital Fitness brought suit against defendant
immediately after defendant enacted the ordinance establishing the TIF district in July 2002.
During four years of lengthy litigation, Capital Fitness pursued its cause to trial, wherein some 14
witnesses testified. Capital Fitness then brought its case to our court, as well as our state supreme
court, thereby exhausting its judicial options–all in an effort to save plaintiff’s Plaza.
What is more, it cannot be ignored that plaintiff undoubtedly knew about Capital Fitness’s
litigation from its inception and knew the contents of its legal assertions against defendant.
Plaintiff’s president and manager, Hsu, testified at Capital Fitness’s trial against defendant. In
addition to her testimony regarding the financial condition of the Plaza, she recounted the multiple
representatives and attorneys she hired in an effort to defeat the TIF district and defendant’s
redevelopment plan, and the several public meetings she attended to voice plaintiff’s objections.
Hsu admitted that plaintiff had recently filed suit against defendant over the TIF district, and that
plaintiff's suit, just as Capital Fitness's suit against defendant, sought to declare the TIF district
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invalid. And, a stay of plaintiff’s suit was issued precisely to await the outcome of Capital
Fitness’s suit. From all this, it is clear to us that, not only did Capital Fitness and plaintiff share
the same legal interest regarding the Plaza and its fate under defendant’s TIF redevelopment
project, but Capital Fitness also adequately represented that shared interest in its suit against
defendant.
Plaintiff hinges its argument on the fact that Capital Fitness was merely a tenant of the
Plaza and, thus, had a differing interest in the litigation from plaintiff, the owner of the Plaza.
Plaintiff, challenging the trial court’s reliance on Sunset Ridge as the basis of its privity finding,
goes so far as to assert that, as a lessee who had only a finite interest in the Plaza, Capital Fitness
“could potentially benefit from the Plaza being designated” as part of defendant’s TIF district
because it could use this fact as “leverage” for lower rent or early lease termination, walk away
without any loss of property, and perhaps end up in the same location in a newer, larger shopping
center. While this may initially have been a hypothesis at the inception of the TIF districting plan,
Capital Fitness itself has made clear, though all its efforts during its seven-year court battle, that
this is nothing more than conjecture and speculation. Had Capital Fitness even remotely
considered that defendant’s TIF ordinance would benefit it in some way (giving it some sort of
leverage or better business opportunity), it is entirely unbelievable that it would have brought a
suit against defendant and pursued it as it did, all the way to our state supreme court. While
Capital Fitness may have been a tenant and not the owner of the Plaza, it had signed its lease in
1997, was to stay there for 11 years, and had options to renew until 2016–amounting to nearly 20
years at that location. Undoubtedly, plaintiff’s interest was to fight against the “permanent” loss
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of property it owned. However, the facts here indicate that Capital Fitness, too, was fighting for
an interest so similar that it can be said to have been so closely aligned to plaintiff’s so as to be in
privity.
Moreover, plaintiff’s claim that the trial court’s reliance on Sunset Ridge was
inappropriate because parts of that decision were “dicta” is unfounded. To the contrary, we find,
as did the trial court, that Sunset Ridge is quite applicable to the instant cause. In that case, the
plaintiff board of education brought suit against, among others, a village and the owner of the
beneficial interest in a certain parcel of property. This suit attacked an ordinance enacted by the
village that the plaintiff alleged was adopted in breach of, and in conflict with, a prior annexation
agreement involving the property. In its suit, the plaintiff complained that development of the
property would increase traffic and adversely harm the surrounding educational environment.
Eventually, the plaintiff’s suit was dismissed on its merits in favor of the defendants and the
plaintiff did not appeal. Six years later, as the village moved ahead with plans to develop the
property, the plaintiff brought suit again. By this time, however, the owner of the beneficial
interest had turned over its interest in the land to others; accordingly, the plaintiff sued not only
the village again, but now also the lessee, the land trustee and a developer. In addition, residents
of the school district with children attending the plaintiff’s schools were allowed to intervene on
behalf of the plaintiff. In this second suit, the plaintiff and its intervenors complained that the
development of the land would harm the educational environment, again citing traffic hazards and
concerns over the quality of education. When the defendants sought dismissal of this second
cause on the basis of res judicata, the plaintiff insisted, in part, that privity could not exist since
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multiple new parties with different interests in the land (the lessee, trustee and developer) were
now involved. See Sunset Ridge, 295 Ill. App. 3d at 910-15.
The Sunset Ridge court agreed with the defendants and declared that the second suit was
barred by the first suit under res judicata. After finding that there had been a final judgment on
the merits rendered by a court of competent jurisdiction and an identity of the causes of action,
the Sunset Ridge court turned to an examination of the element of privity and chose to do so
regarding both sides in the suit: the plaintiffs and the defendants. See Sunset Ridge, 295 Ill. App.
3d at 915-18. First, regarding the plaintiffs, it noted, as we have, that privity exists between
parties who adequately represent the same legal interests. See Sunset Ridge, 295 Ill. App. 3d at
918. Reviewing the facts of the cause, the Sunset Ridge court concluded that the plaintiff in the
prior suit and the intervenors in the subsequent suit shared the same legal interest: both had cited
the quality of education and traffic congestion as the crux of their complaints. See Sunset Ridge,
295 Ill. App. 3d at 918-19. Therefore, privity existed between them, since the plaintiff in the first
suit had adequately represented this interest. See Sunset Ridge, 295 Ill. App. 3d at 919. Then,
regarding the defendants, the Sunset Ridge court noted, again as we have, that "privity exists
between parties who share a mutual or successive relationship in property rights which were the
subject of a prior action." Sunset Ridge, 295 Ill. App. 3d at 919. Accordingly, because the
lessee, trustee and developer shared such a successive relationship in the property rights of the
land at issue with the original owner who was a defendant in the prior suit, the Sunset Ridge court
determined that there was privity among the defendants as well. See Sunset Ridge, 295 Ill. App.
3d at 919.
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Similar to the defendants in Sunset Ridge, Plaza tenant Capital Fitness shared a mutual
relationship in property rights with plaintiff, the Plaza landlord. And, as we have already
discussed at length, these mutual property rights were the subject of a prior action–Capital
Fitness’s suit against defendant regarding the Plaza property, and the propriety of the TIF district
and of its inclusion of the Plaza therein. This mutual relationship in property rights which Capital
Fitness and plaintiff share, then, clearly demonstrates a legal interest that is so closely aligned that
it amounts to privity between them. Ultimately, having been adequately represented in Capital
Fitness’s prior suit, this privity results in the operation of res judicata to now bar plaintiff’s instant
(subsequent) suit. See, e.g., Sunset Ridge, 295 Ill. App. 3d at 918-19; Furgatch v. Butler, 188 Ill.
App. 3d 1060, 1066-67 (1988) (res judicata barred property owner’s suit against the defendant
since the lessee had already filed suit against the defendant challenging the same city ordinance;
privity of parties existed because property owner and lessee shared a mutual relationship to the
same property rights considered in the prior litigation); see also St John’s, 404 Ill. App. 3d at 514-
15 (privity existed between church and its parishioner in prior suit on the one hand, and
intervenors in subsequent suit on the other, as all shared mutual relationship in property rights in
the graves of ancestors buried in cemetery).
We now turn to plaintiff’s alternative argument on appeal. Plaintiff claims that, if we were
to conclude, as we have, that res judicata operates to bar its original counts for injunctive relief
and declaratory judgment against defendant, it does not apply to the two constitutional counts it
added to its complaint because these rendered its cause of action different from Capital Fitness’s
cause of action against defendant. Plaintiff claims that the trial court mistakenly assumed that it
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added these counts after defendant filed its motion for summary judgment, and that the court
mistakenly believed plaintiff conceded at the hearings that the constitutional issues it raised were
barred by Crouch. While we agree with plaintiff that the trial court was mistaken, we do not
agree that its constitutional counts survive the application of res judicata.
At the outset, we note that plaintiff is correct regarding its assertions of the trial court’s
mistakes. For example, the trial court, during the hearings and in its written order, repeatedly
referred to plaintiff’s constitutional counts as “late” and “recently added.” It also stated, in what
seems to be an attempt at a reprimand, that plaintiff amended its complaint to add these counts
after defendant had moved for summary judgment. Indeed, defendant, too, asserted before the
trial court that this was the timeline regarding the filings in this cause, and continues to assert on
appeal that this is what occurred. This, however, was not the case. The record makes clear that
plaintiff amended its complaint to add the constitutional counts on November 1, 2007, while
defendant did not file its motion for summary judgment until January 4, 2010. Clearly, then, any
assertion by defendant and/or the trial court that plaintiff waited to amend, and any interpretation
drawn from that assertion, was mistaken.
Moreover, from our review of the record, we cannot say, without a doubt, that plaintiff
“conceded” the constitutional issues it raised. Rather, in our view, the exchange between plaintiff
and the trial court in this regard did not end in any concession. As we noted early in this decision,
the trial court pointed out to plaintiff that our state supreme court had already dealt with a
challenge to the constitutionality of the TIF statute in Crouch, and asked plaintiff if it would
concede this. Plaintiff specifically maintained that it did not concede this and continued to argue
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No. 1-10-1599
that its constitutional claims should be heard. Plaintiff explained to the trial court that
constitutionality was “a different issue” and that it was pleading “a different legal theory based
upon certain facts.” Following repeated attempts by plaintiff to further explain its stance and the
trial court’s repeated prompting to accept that Crouch already disposed of the constitutional
issues, plaintiff finally stated that it was “conceding” that Crouch “has been decided by the Illinois
Supreme Court and it is good law.”
Having read the full exchange between plaintiff and the trial court, its context indicates to
us that plaintiff, while “conceding” the existence of Crouch and its legal validity, was not at the
same time conceding its constitutional issues. To the contrary, plaintiff continuously argued with
the trial court that, despite Crouch, the fact that it asserted a different legal theory (i.e.,
constitutionality of the TIF statute) other than its original counts for injunctive and declaratory
relief rendered its cause of action different from Capital Fitness’s cause of action and, thus, the
trial court should not employ res judicata to bar these counts. This was, truly, the crux of
plaintiff’s argument: because the constitutional issues it raised against defendant had not been
raised by Capital Fitness in its prior suit against defendant, there was no identity of cause of
action–an element of res judicata. For the trial court to simply state that plaintiff “conceded” the
constitutionality of the TIF statute, and thereby abandoned this major portion of its amended
complaint, solely on the basis of the exchange that took place here was, we believe, based on the
circumstances, a mistake.
However, while these mistakes may have occurred, they do not change the fact that res
judicata operates to bar plaintiff’s constitutional claims as well.
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No. 1-10-1599
As we noted at the outset of this decision, the standard of review here is de novo. See
Rich, 226 Ill. 2d at 370 (review of grant of summary judgment is de novo); Matejczyk, 397 Ill.
App. 3d at 7 (whether claim is barred by res judicata is reviewed de novo). Accordingly,
regardless of the thoughts and opinions expressed by the trial court below regarding what
occurred during the proceedings, we may affirm this cause on any ground appearing in the record.
See Wilkerson v. Paul H. Schwendener, Inc., 379 Ill. App. 3d 491, 493 (2008); Howard v.
Firmand, 378 Ill. App. 3d 147, 149 (2007).
As we mentioned in our discussion of res judicata, once its elements are established, its
bar extends to all matters that were offered to sustain or defeat the claim or demand, as well as to
any and all other matters which may have or could have been offered for that purpose. See
Nowak, 197 Ill. 2d at 389; Matejczyk, 397 Ill. App. 3d at 3. This means, then, that res judicata
prevents a nonparty from asserting not only claims that were actually decided in the original
lawsuit, but also those claims that could have been decided in that prior lawsuit. See Purmal, 354
Ill. App. 3d at 722; Furgatch, 188 Ill. App. 3d at 1065. “Res judicata applies even if a different
type of relief or damage is sought in the subsequent action as long as the same *** operative facts
give[] rise to the successive assertions of relief.” Furgatch, 188 Ill. App. 3d at 1065-66; accord
River Park, 184 Ill. 2d at 314-15 (addition of new theories of relief in a subsequent suit does not
save suit from res judicata, if these theories still arise from same operative facts involved in prior
suit; they are, instead, considered to comprise one single cause of action).
Capital Fitness’ cause against defendant was based on the same set of operative facts as
plaintiff’s cause against defendant–defendant’s implementation of the TIF district under the Act
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No. 1-10-1599
which, in turn, affected the existence of the Plaza in which Capital Fitness and plaintiff held
mutual property rights. Capital Fitness and plaintiff even alleged the same facts and sought the
same relief in their complaints and, as we have just concluded, were privies. The only difference
in these suits was that plaintiff amended its complaint to add two counts challenging the
constitutionality of the Act--all other material facts involved remained the same in these suits.
Clearly, Capital Fitness could have raised these same constitutional claims in its prior suit against
defendant. That it chose not to do so, for whatever reason, is irrelevant here. Because the exact
same operative facts were involved in both suits and form the basis of plaintiff’s additional
theories of relief, these theories were part of one single cause of action against defendant and are,
therefore, barred by res judicata. See Furgatch, 188 Ill. App. 3d at 1066-67 (because lessee
could have raised constitutional issue regarding zoning ordinance and its effect on building in
prior suit against the defendant, the plaintiff was barred by res judicata from raising it in his
subsequent suit against the defendant which was based on same set of operative facts); see, e.g.,
River Park, 184 Ill. 2d at 314-17 (although the plaintiff’s claims in successive suit asserted
different theory of recovery and sought different relief from prior suit, res judicata barred them
because these different theories and relief still arose from single group of operative facts involved
in both suits; therefore, they constituted one single cause of action). Accordingly, we find that
plaintiff’s alternative argument seeking remand of its constitutional claims to the trial court must
fail.
As a final note, we recognize plaintiff’s outcry at the end of its brief on appeal that the
equities do not favor the application of res judicata in this case. It insists that defendant waited
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No. 1-10-1599
some four years before taking action with respect to the Plaza, driving out plaintiff’s tenants and
devaluing its property. Plaintiff also cites the historical misuse of the Act and its right to have its
day in court, claiming that res judicata’s application here “would essentially require every
landlord property owner to spend money litigating an issue *** the moment one tenant elected to
immediately file suit.”
Having acknowledged these claims, however, we believe that the instant cause presents a
prime example of the proper application of res judicata. As we have thoroughly discussed, each
of its elements has been met: Capital Fitness brought a suit against defendant to final adjudication,
that suit clearly involved an identity of the same cause of action as the suit plaintiff subsequently
filed against defendant, and Capital Fitness and plaintiff stood in privity with regard to the same
set of operative facts. Cases calling for the application of res judicata oftentimes are more
convoluted than the instant one. Here, it is simple. Defendant enacted an ordinance affecting the
Plaza in which plaintiff and Capital Fitness held mutual property rights. Capital Fitness sued
defendant immediately to stop its implementation of the ordinance, while plaintiff did not.
Instead, plaintiff chose to wait before subsequently doing the same thing, instead of joining with
Capital Fitness when the challenge against defendant was first raised. While it is unfortunate for
plaintiff that Capital Fitness lost its suit, to allow it to pursue its suit would essentially condemn
defendant to relitigate issues already decided in all potential suits filed by anyone with a property
interest in the Plaza. This is precisely what res judicata was meant to prevent.
CONCLUSION
Accordingly, for all the foregoing reasons, we affirm the judgment of the trial court
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No. 1-10-1599
granting summary judgment in favor of defendant and against plaintiff on all counts of plaintiff’s
complaint based on res judicata.
Affirmed.
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