Kenneth Michaels, Jr., Bauch & Michaels, LLC, Chicago
312-588-5000 | E-Mail Kenneth Michaels, Jr.
Condo Board’s Lawsuit Against Developer Constitutes “Prior Pending Action”
In Majerle v. Winona, 1302 LLC, 2024 IL App (1st) 231339-U, when a condominium board of directors sued a developer and others for construction defects on a newly constructed six-unit condominium building and a unit owner then brought his own action against the same defendants, the appellate court affirmed dismissal of the unit owner’s later-filed lawsuit.
Facts
In May 2020, the board of a newly constructed six-unit condominium building sued the developer and others for construction defects. In June 2022, one of the unit owners sued the same defendants for essentially the same claims. 2024 IL App (1st) 231339-U at ¶2. The defendants moved to dismiss the unit owner’s action pursuant to §§2-619(a)(3) and 2-619(a)(9) of the Code of Civil Procedure. The trial court dismissed the lawsuit as a “prior pending action,” and the appellate court affirmed. 2024 IL App (1st) 231339-U at ¶2.
After the defendants filed a motion to dismiss pursuant to §2-619(a)(3), the court granted the defendants’ motion to consolidate the two actions, and the plaintiff’s motion for substitution of judge as a matter of right was granted. 2024 IL App (1st) 231339-U at ¶9. The trial court then dismissed the unit owner’s lawsuit pursuant §2-619(a)(3) because the plaintiff’s “interest[s] are represented by the board’s lawsuit and defending against the [plaintiff’]’s action would cause multiplicity and vexation.” 2024 IL App (1st) 231339-U at ¶10. In denying the plaintiff’s motion for reconsideration, the trial court rejected the plaintiff’s arguments that under the ruling a unit owner with standing could never bring his or her own action if the association filed first and the court’s ruling would not create a race to the courthouse in condominium cases. 2024 IL App (1st) 231339-U at ¶11.
Analysis
As the appellate court recognized here, generally dispositions by motions to dismiss are given de novo review. 2024 IL App (1st) 231339-U at ¶14. However, as here, when the appellate court reviewed the trial court’s consideration of several factors on an inherently procedural motion to dismiss, such as a §2-619(a)(3) motion, the trial court’s decision is reviewed under an abuse of discretion standard. 2024 IL App (1st) 231339-U at ¶14, citing Overnite Transportation Co. v. International Brotherhood of Teamsters, 332 Ill.App.3d 69, 73, 773 N.E.2d 26, 265 Ill.Dec. 664 (1st Dist. 2002). “An abuse of discretion occurs where the trial court’s ruling is ‘arbitrary, fanciful, or unreasonable, or where no reasonable person would take the same view.’ ” 2024 IL App (1st) 231339-U at ¶14, citing People v. Illgen, 145 Ill. 2d 353, 583 N.E.2d 515, 165 Ill.Dec. 599 (5th Dist. 1991).
The appellate court observed that “[s]ection 2-619(a)(3) provides for dismissal where ‘there is another action pending between the same parties for the same cause.’ ” 2024 IL App (1st) 231339-U at ¶15, citing 735 ILCS 2-619(a)(3). This section of the Code is “to avoid duplicative litigation and is to be applied to carry out that purpose.” 2024 IL App (1st) 231339-U at ¶15, quoting Kellerman v. MCI Telecommunications Corp., 112 Ill.2d 428, 493 N.E.2d 1045, 1053, 98 Ill. Dec. 24 (1986). The “same parties” requirement may be satisfied if the litigants’ interests are similar; the number and names of the parties do not need to exactly match. The “same cause” requirement is satisfied when the relief requested arises from substantially the same set of facts. 2024 IL App (1st) 231339-U at ¶16. “[T]he crucial inquiry is whether both [lawsuits] arise out of the same transaction or occurrence, not whether the legal theory, issues, burden of proof, or relief sought materially differs between the two actions.” 2024 IL App (1st) 231339-U at ¶16, quoting Performance Network Solutions, Inc. v. Cyberklix US, Inc., 2012 IL App (1st) 110137, ¶31, 966 N.E.2d 396, 359 Ill.Dec. 75, and Jackson v. Callan Publishing, Inc., 356 Ill.App.3d 326, 337, 826 N.E.2d 413, 292 Ill.Dec. 272 (1st Dist. 2005).
No dispute existed that the two cases involved the same parties and causes. 2024 IL App (1st) 231339-U at ¶17. Without giving any specifics, the plaintiff unit owners argued that his interests could vary greatly from that of the board and the vision of success in outcome and case handling could vary. 2024 IL App (1st) 231339-U at ¶18. The appellate court noted that satisfying the same parties and same causes prongs are not automatically dispositive. 2024 IL App (1st) 231339-U at ¶19. As discussed in Kellerman, there are other factors to consider including (a) comity; (b) prevention of multiplicity, vexation, and harassment; (c) the likelihood of obtaining complete relief in a foreign jurisdiction; and (d) the res judicata effect of a foreign judgment in a local forum. 2024 IL App (1st) 231339-U at ¶19.
In comparing the actions filed, the appellate court reached the conclusion that the trial court did not abuse its discretion in dismissing the plaintiff’s lawsuit as duplicative. 2024 IL App (1st) 231339-U at ¶20. Furthermore, the appellate court noted that §9.1(b) of the Illinois Condominium Property Act empowered the board of directors to have standing and the power to act in a representative capacity on behalf of the unit owners for any claims involving the common elements or more than one unit. 2024 IL App (1st) 231339-U at ¶21, citing 765 ILCS 605/9.1(b). The appellate court also noted that if the board failed to represent an owner’s interests in its lawsuit, the unit owner can sue the board of directors in a derivative claim. 2024 IL App (1st) 231339-U at ¶22. While this last statement by the appellate court may not be entirely correct, the gist of what the appellate court is saying is plain enough.
For more information about condominium law, see CONDOMINIUM LAW: DAILY OPERATION CHALLENGES (IICLE®, 2024). Online Library subscribers can view it for free by clicking here. If you don’t currently subscribe to the Online Library, visit www.iicle.com/subscriptions.