No. 1-14-3853 Opinion filed March 15, 2016 Second Division

IN THE

APPELLATE COURT OF ILLINOIS

FIRST DISTRICT

) Appeal from the Circuit Court HERBERT P. CARLSON, ) of Cook County. ) Plaintiff-Appellant, ) ) No. 13 L 12010 v. ) ) THE REHABILITATION INSTITUTE OF ) CHICAGO, an Illinois Not-For Profit Corporation, ) and SUPERIOR AIR GROUND AMBULANCE ) The Honorable SERVICE, INC., ) Raymond W. Mitchell, ) Judge, presiding. Defendants-Appellees. )

JUSTICE HYMAN delivered the judgment of the court, with opinion. Presiding Justice Pierce and Justice Simon concurred in the judgment and opinion.

OPINION

¶1 A nonemergency wheelchair van taking plaintiff Herbert Carlson from one medical

facility to another facility located a little over a mile away got involved in a minor accident (the

van struck the rearview mirror on a CTA bus). Carlson remained in the van for two to three

hours before substitute transportation arrived. Carlson sued the transport company for negligence

and breach of contract and its parent corporation for breach of contract. Before trial, however,

Carlson voluntarily dismissed the contract claims, and went to trial only against the transport

company on the negligence claim. A jury found against Carlson. 1-14-3853

¶2 A year later this suit arose when Carlson again sued the parent corporation of the

transport company and also sued the medical facility from which he had been taken for breach of

contract, propounding a third-party beneficiary theory of standing. Rejecting this argument, the

trial court granted both defendants' motions to dismiss. Moreover, the trial court found the 2013

claim was barred by the doctrine of res judicata and collateral estoppel. We affirm. Carlson

lacked standing to sue as he was not a party to the contract nor was he a third-party beneficiary

of the contract between the medical facility and the transport company. Additionally, Carlson’s

claim arose from the same occurrence that served as the basis for the earlier negligence lawsuit

against the transport service; therefore, res judicata operated to bar the claim against its parent

company as a party in privity.

¶3 BACKGROUND

¶4 In 2000, defendants The Rehabilitation Institute of Chicago (RIC) and Superior Air

Ground Ambulance Service, Inc., executed a “Transportation Service Agreement” providing for

emergency and nonemergency transport of patients “to other facilities and locations.” If non-

emergency transport was needed, the contract stated Superior’s wholly owned subsidiary would

provide “Medicar Service (Courtesy Van) transport services” for nonemergency routine

transportation.

¶5 A Medi-Car wheelchair van transferring Carlson from RIC to Warren Barr Pavilion

clipped the mirror of a CTA bus. Police were summoned but left after 15 minutes because there

were no injuries or damages other than to the bus mirror. Medi-Car waited for an “accident

relief” van to complete the trip, forcing Carlson to remain in the van for two to three hour under

less than ideal circumstances.

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¶6 Carlson sued Medi-Car, alleging it was negligent during the incident (case No. 08-L-

2534). In 2010, Carlson amended his complaint to add Superior under a breach of contract

theory, but in 2012 voluntarily dismissed Superior under section 2-1009 of the Code of Civil

Procedure (Code). 735 ILCS 5/2-1009 (West 2008). A jury found Medi-Car was not negligent.

(Judge Drella Savage presided over the trial).

¶7 In 2013, Carlson again sued Superior, alleging breach of contract based on his status as a

third-party beneficiary (case No. 13-L-12010). In March 2014, Carlson amended his complaint

to add RIC. Carlson alleged that Medi-Car was a wholly-owned subsidiary of Superior and

asserted a breach of contract claim against RIC as well as Superior.

¶8 Additionally, Carlson sought sanctions against Superior’s attorneys for “intentionally

refusing” to disclose relevant information to his attorney and to the trial court, referring to an

order entered in the earlier case against Medi-Car (case No. 08-L-2534). The referenced

undisclosed information appears to be Judge Savage’s ruling that Carlson was a third-party

beneficiary. The record also contains Judge Savage’s May 3, 2011 order denying Carlson’s

motion for leave to amend his amended complaint to add a prayer for relief seeking punitive

damages.

¶9 On November 17, 2014, Judge Mitchell granted RIC’s and Superior’s motions to dismiss

brought under section 2-619 of the Code. 735 ILCS 5/2-619 (West 2012). At the hearing on

Carlson’s motion to reconsider this order, Judge Mitchell remarked on the possibility that

another judge had reached a different conclusion on the third-party beneficiary status, "To me, it

doesn’t really make a difference in mind [sic]. It is just not a third-party beneficiary contract.”

¶ 10 ANALYSIS

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¶ 11 The standard of review of motions to dismiss under either section 2-615 or section 2-619

is de novo. Neppl v. Murphy,

(2000). Additionally, because we review

the trial court's judgment, not its rationale, we may affirm for any reason supported by the record

regardless of the basis cited by the trial court. D'Attomo v. Baumbeck,

.

¶ 12 A motion to dismiss under section 2-619 motion admits the legal sufficiency of the

complaint and raises defects, defenses, or other “affirmative matter” which appear on the face of

the complaint or are established by external submissions which act to defeat the plaintiff's claim.

Neppl,

. In ruling on the motion, the trial court must take all properly

pleaded facts as true, and the complaint should not be dismissed unless it appears that no set of

facts under the pleadings can be proved that would entitle the plaintiff to recover. Barbra Village

of Bensenville,

, ¶ 19. If a cause of action is dismissed under section 2-

619 motion, the questions on appeal are whether a genuine issue of material fact exists and

whether the defendant is entitled to a judgment as a matter of law. La Salle National Bank v. City

Suites, Inc.,

(2001).

¶ 13 To establish a breach of contract claim, a plaintiff must prove the existence of a valid and

enforceable contract, performance by the plaintiff, breach of the contract by the defendant, and

damages or injury to the plaintiff resulting from the breach. Sheth v. SAB Tool Supply Co.,

. In third-party beneficiary contracts, a party (the promisor) promises

to render a certain performance not to the other party (promisee), but rather to a third person

(beneficiary). MBD Enterprises, Inc. v. American National Bank of Chicago,

(1995).

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¶ 14 Illinois recognizes two types of third-party beneficiaries, intended and incidental. Hacker

v. Shelter Insurance Co.,

(2009). An intended beneficiary is intended

by the parties to the contract to directly benefit for the performance of the agreement; under the

contract an intended beneficiary has rights and may sue.

An incidental beneficiary has no

rights and may not sue to enforce them.

“Liability to a third-party must affirmatively appear

from the contract's language and from the circumstances surrounding the parties at the time of its

execution, and cannot be expanded or enlarged simply because the situation and circumstances

justify or demand further or other liability.” Ball Corp. v. Bohlin Building Corp.,

(1989). Moreover, while circumstances surrounding the execution of the contract may

be considered, the alleged third-party beneficiary must be expressly named in the contract.

Paukovitz v. Imperial Homes, Inc.,

(1995); see also Estate of Willis

II v. Kiferbaum Construction Corp.,

(2005) (in Illinois presumption

against construing contract in favor of third-party beneficiary status can only be overcome by “an

implication so strong as to be practically an express declaration.” (citing Ball Corp.,

)). Thus, “[t]he operative question is whether the parties to the contract intended to

confer a direct benefit on the purported third-party beneficiary.” (Emphasis omitted.) Bank of

America National Ass'n v. Bassman FBT, L.L.C.,

.

¶ 15 Without a third-party beneficiary status, “a litigant lacks standing to attack an assignment

to which he or she is not a party.” Id.¶ 15. Thus, a challenge to the plaintiff’s third-party

beneficiary status is a proper affirmative defense in a section 2-619 motion to dismiss.

¶ 16 The contract between RIC and Superior contains no language indicating that the parties

intended to benefit either “patients” in general, or Carlson in particular. We agree with the trial

court’s statement that “the mere reference to a party in a contract will not confer third-party

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beneficiary status.” In our view, the contract as a whole expresses only the intent of RIC to

provide for patient transport using the services of Superior Ambulance. In the absence of an

express provision, we find that the contract between Superior and RIC did not intend to confer a

direct benefit to the “patient” being transported, rather, the benefit was, as the trial court found,

the “transportation of patients in exchange for payment.” Carlson was not an intended third-party

beneficiary, and thus lacks standing to sue.

¶ 17 Finally, we reject Carlson’s argument that a “ruling” by the judge in the earlier case on

his status as third-party beneficiary to the contract between RIC and Superior binds a successor

trial judge. As Superior points out, our review of a motion to dismiss is de novo. Carlson relies

on Balciunas v. Duff,

(1983), where the Illinois Supreme Court declined to issue a

writ of mandamus to regulate discovery in the trial court, holding that a successor judge should

have deferred to the discretion of another judge’s earlier ruling on discovery motions. We fail to

see how Balciunas applies here. Even if Carlson’s representation of Judge Savage’s "ruling" was

accurate (which our review of the record does not support), the "ruling" would have no binding

authority as to our de novo review.

¶ 18 Res Judicata and Collateral Estoppel

¶ 19 Alternatively, Carlson argues that the equitable doctrines of res judicata and collateral

estoppel do not apply.

¶ 20 Courts often describe res judicata as claim preclusion and collateral estoppel as issue

preclusion. See In re Huron Consulting Group, Inc.,

. “ ‘[R]es

judicata, while similar to collateral estoppel, deals with the same claim or cause of action, while

collateral estoppel deals with identical issues.’ ” (Emphases in original.) Schandelmeier-Bartels

v. Chicago Park District,

(quoting Illinois Health Maintenance

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Organization Guaranty Ass'n v. Department of Insurance,

(2007)).

Collateral estoppel may apply both to prior findings of fact and prior determinations of law. See

Du Page Forklift Service, Inc. v. Material Handling Services, Inc.,

, (2001).

¶ 21 Given our resolution of Carlson’s third-party beneficiary status, we need not consider the

argument that res judicata would not bar this action against both RIC and Superior.

Nevertheless, we address res judicata as it applies to Superior as a party in privity with Medi-

Car.

¶ 22 Res judicata prevents a multiplicity of lawsuits between the same parties where the facts

and issues are the same. Quintas v. Asset Management Group, Inc.,

(2009). Under the doctrine, a final judgment on the merits rendered by a “court of competent

jurisdiction” bars a later suit between the same parties involving the same cause of action. River

Park, Inc. v. City of Highland Park,

(1998). Whether a claim is barred under

the doctrine of res judicata presents a question of law, which we review de novo. Arvia v.

Madigan,

(2004).

¶ 23 The doctrine has three requirements: (1) identity of parties or their privies in the lawsuits;

(2) identity of causes of action; and (3) final judgment on the merits rendered by a court of

competent jurisdiction. Hudson v. City of Chicago,

(2008). Once these three

requirements have been satisfied, res judicata “bars not only what was actually decided in the

first action but also whatever could have been decided.”

“[T]he facts as they exist at the time

of judgment determine whether res judicata bars a subsequent action.” (Emphasis and internal

quotation marks omitted.) Doe v. Gleicher,

(2009).

¶ 24 The first requirement provides the basis for a finding of privity (Singer v. Brookman,

(1991)); in other words, privity exists between parties who adequately

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represent the same legal interests. People ex rel. Burris v. Progressive Land Developers, Inc.,

(1992). The identity of interest, not the nominal identity of the parties,

controls. Indian Harbor Insurance Co. v. MMT Demolition, Inc.,

. Medi-Car, a wholly owned subsidiary of Superior, undoubtedly had the same interests as

Superior, regardless of the nature of the claim. The fact that Medi-Car was set up as a separate

legal entity does not destroy the identity of interests.

¶ 25 Quoting Gass v. Anna Hospital Corp.,

(2009), Carlson argues

that Superior and Medi-Car are not the same because corporations are legal entities “separate and

distinct from its shareholders, directors and officers and from other corporations with which it

may be connected.” Gass addressed a completely different equitable doctrine, piercing the

corporate veil, and does not negate the concept of identity of interests.

¶ 26 As to the second requirement, identity of cause of action, Carlson asserts that his cause of

action sounds in contract, rather than tort as in the 2008 lawsuit. Illinois courts use the

transactional test to determine whether causes of action are the same for res judicata purposes.

River Park,

. Under this test, separate claims will be considered the same cause

of action for purposes of res judicata if they arise from a single group of operative facts,

regardless of whether they seek different theories of relief.

.

¶ 27 “Where the same factual allegations form the basis for the two allegedly different causes

of action, the fact that a party proceeds on different theories or seeks different relief does not

prevent the operation of res judicata.” Best Coin-Op, Inc. v. Paul F. Ilg Supply Co.,

(1989) (citing Barth v. Reagan,

(1986)). See Singer v.

Brookman,

(1991) (“Plaintiffs' actions are really just a different means

to the same end and are identical for purposes of res judicata.”). The 2008 complaint and the

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2013 complaint set forth causes of action arising from the same set of operative facts. Despite

Carlson’s attempt to differentiate the two causes of action, the complaints allege the same

underlying injury resulting from the same occurrence.

¶ 28 As a matter of public policy, a plaintiff is not permitted to engage in claim-splitting.

Hudson v. City of Chicago,

(2008). This rule against claim-splitting flows

from the principle that litigation should have an end and no person should be unnecessarily

harassed with a multiplicity of lawsuits. Piagentini v. Ford Motor Co.,

(2009); Doe v. Gleicher,

(2009). “To allow the splitting of claims or

causes of action even in the absence of a ruling on the merits of all claims or all causes of action

is contrary to the policy consideration central to res judicata of promoting finality.” Matejczyk v.

City of Chicago,

(2009).

¶ 29 The facts underlying Carlson’s claim arose from the same incident—Carlson being

forced to remain in a medical transport van after a minor traffic accident. Couching the claim

against Superior in contract terms vis-à-vis a claim in tort against Medi-Car does not change the

core of operative facts. See River Park,

. There was one incident, one plaintiff,

and one claim. Carlson pursued the negligence count against Medi-Car in the 2008 case while

voluntarily dismissing the breach of contract count against Superior. Carlson’s effort to separate

the two claims constitutes a classic case of claim-splitting which arose when he chose to dismiss

his original complaint against Superior. Having done so, he cannot now be heard to complain.

¶ 30 Finally, the doctrine of res judicata requires a final judgment on the merits. A jury

reached a verdict in the first lawsuit, finding for Medi-Car and against Carlson. Because this was

not the resolution Carlson hoped for, he sought relief in a different manner and switched gears to

reassert his claim against Superior and to bring in RIC as a defendant. The verdict in the 2008

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case, however, fulfills the requirement of a final judgment on the merits to bar Carlson’s later

claim.

¶ 31 Equity dictates that the doctrine of res judicata should only be applied as fairness and

justice require, but not where it would be fundamentally unfair to do so. Piagentini,

. The three elements of res judicata are present, and Carlson had a fair and reasonable

opportunity to have fully litigated his claim in the original lawsuit. We affirm the dismissal

against Superior on this basis.

¶ 32 Regarding RIC, the first requirement of parties in privity would not be fulfilled and the

doctrine would not prevent the cause going forward insofar as it pertains to RIC. But, as

discussed, Carlson’s assertion of his status as third-party beneficiary fails, and, therefore, the trial

court properly dismissed his claim against RIC on that basis.

¶ 33 Carlson also argues that collateral estoppel would not bar his second lawsuit. Having

determined that Carlson lacked standing to sue either RIC or Superior, we need not address the

affirmative defense of collateral estoppel.

¶ 34 Sanctions

¶ 35 Carlson challenges the trial court’s denial of his motion for sanctions. He accuses

Superior’s attorneys of intentionally refusing to disclose relevant fact information to his attorney

and to the trial court as it relates to a ruling by Judge Savage in the 2008 case.

¶ 36 Illinois Supreme Court Rule 341(h)(7) (eff. Feb. 6, 2013) provides that an appellant's

brief shall contain “[a]rgument, which shall contain the contentions of the appellant and the

reasons therefor, with citation of the authorities and the pages of the record relied on.” Moreover,

“[t]he appellate court is not a repository into which an appellant may foist the burden of

argument and research.” Ramos v. Kewanee Hospital,

; see also

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Obert v. Saville,

(1993) (“A reviewing court is entitled to have issues

clearly defined with pertinent authority cited and cohesive arguments presented ***.”). Carlson

cites no authority. We agree with Superior that Carlson has forfeited this issue.

¶ 37 In any event, the determination of whether to impose sanctions under Rule 137 lies with

the sound discretion of the trial court; the decision to impose or deny sanctions is entitled to great

weight on appeal and will not be disturbed on review absent an abuse of discretion. Gambino v.

Boulevard Mortgage Corp.,

(2009). The record contains an order entered

in August 2014 and withdrawn after Carlson filed his motion for reconsideration. Carlson

appeals from the replacement order entered in November 2014. That order is detailed and well-

reasoned. Regarding sanctions, the order read “Finally, both Plaintiff and Defendant Superior, at

various points, invoke Rule 137. Sanctions are not warranted on the record before the Court and

all requests are denied.”

¶ 38 Although the court did not address each of the allegations of misconduct raised by the

parties, it is apparent that the trial court heard and considered the arguments from both parties

and knew the case’s lengthy history before ruling. See Technology Innovation Center, Inc. v.

Advanced Multiuser Technologies Corp.,

(2000) (affording

deference to trial court's ruling on motion for Rule 137 sanctions even though court did not

address each allegation of misconduct individually because it was apparent court was aware of

history of case and gave consideration to allegations as a whole). Accordingly, we find that the

trial court set forth a sufficient basis for its ruling, and Carlson’s request for sanctions was

properly denied.

¶ 39 Affirmed.

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