author: JUSTICE McNULTY JUSTICE McNULTY

text:
    DAVID SINGER, Indiv. and as Brother and Next Friend of Jonathan Singer, Plaintiffs-Appellants, v. MAUREEN BROOKMAN, f/k/a Maureen Singer, Defendant-Appellee.
    First District (5th Division)
    Nos. 1 — 89—1808, 1—89—2530 cons.
    Opinion filed April 5, 1991.
    Supplemental opinion filed on denial of rehearing July 19, 1991.
    Rehearing denied August 19, 1991.

      Jerome Feldman and David Feldman, both of Feldman & Halprin, of Chicago, for appellants.
    Steven P. Gomberg and Barbara L. Yong, both of Siegan, Barbakoff & Gomberg, of Chicago, for appellee.
   JUSTICE McNULTY

delivered the opinion of the court:

This appeal results from the dismissal with prejudice of plaintiffs’ two-count complaint against their mother for an accounting and breach of fiduciary duty. The trial judge in the chancery proceeding dismissed the complaint under sections 2 — 615 and 2— 619(a)(4) of the Code of Civil Procedure on the grounds of res judicata and insufficiency of the complaint to state a cause of action. (Ill. Rev. Stat. 1983, ch. 110, pars. 2 — 615, 2 — 619(a)(4).) He also entered sanctions in the amount of $9,174.30 against plaintiff David Singer and his attorneys pursuant to Supreme Court Rule 137 (134 Ill. 2d R. 137). Both plaintiffs appeal the dismissal of their complaint, and David Singer and his attorneys appeal the subsequent award of sanctions.

On April 6, 1987, Larry Singer (plaintiffs’ father), filed a petition in the domestic relations division requesting the issuance of a rule to show cause against Maureen Singer (plaintiffs’ mother), based' on Ms. Singer’s alleged failure to supply him with David and Jonathan’s checking account information on a regular basis as required by the supplemental judgment to the dissolution of marriage. The petition also sought a “full and regular accounting” of the plaintiffs’ earnings since the entry of the judgment for dissolution. Although it was argued that such accounting was justified by virtue of the Uniform Transfers to Minors Act (the UTMA) (Ill. Rev. Stat. 1985, ch. HQNz, par. 270), at no time were pleadings introduced specifically alleging a violation of the UTMA.

The trial court determined that Ms. Singer had a duty to account for the children’s income and expenditures beginning at the time of the initial judgment for dissolution of marriage (May 1, 1984), but that the obligation not to use the earnings for nonbusiness purposes began with the supplemental judgment and imposed “a new and higher responsibility with regard to the expenditures.” After an evidentiary hearing and a complete accounting of all income received, the rule to show cause was denied, as the court found that Ms. Singer had furnished all necessary documentation. However, it was determined that Ms. Singer had allowed some use of the plaintiffs’ funds for their non-business-related expenses.

Based on this accounting, the trial judge calculated the amount of the funds which had been used for nonbusiness expenses and ordered that these funds be paid back to the children, and set up a payment plan for that purpose. No appeal was taken from this order of March 23, 1988.

On October 19, 1988, plaintiffs Jonathan and David Singer, by and through the same attorneys who had represented their father in the post-decree proceedings, filed a two-count complaint in chancery seeking an accounting from 1983 forward, and alleging that their mother had used their funds in various checking, saving and investment accounts (opened under the UTMA) for improper purposes. Count I of the complaint sought an accounting of all monies earned and all expenditures made from the custodian accounts since 1983 pursuant to section 20 of the UTMA. (Ill. Rev. Stat. 1985, ch. 1101/2, par. 270.) Count II alleged a breach of fiduciary duty on the part of the mother by intentionally depleting the custodial accounts, and sought damages in an unspecified amount and punitive damages in the amount of $25,000.

On June 9, 1989, the trial judge in the chancery proceeding granted defendant’s motions to dismiss plaintiffs’ complaint under section 2 — 619 based upon res judicata and collateral estoppel. He also granted defendant’s motions to strike and dismiss under section 2 — 615 based on technical defects in plaintiffs’ complaint. He further granted defendant’s request for sanctions under section 2— 611 in the amount of $9,174.30, as he found the action was objectively unreasonable by every standard, “unsound both legally and factually, frivolous and vexatious, mean spirited and vindictive.”

The doctrine of res judicata (section 2 — 619(a)(4) of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 2— 619(a)(4))) requires a dismissal with prejudice where an action is barred by a prior judgment. In order for this doctrine of preclusion by prior judgment to apply, there must be an identity of parties or their privies, identity of the cause of action and subject matter, and a final judgment on the merits in the earlier suit. Best Coin-Op, Inc. v. Paul F. Ilg Supply Co. (1989), 189 Ill. App. 3d 638, 545 N.E.2d 481.

The first element to be established for a finding of res judicata, is identity of parties. Either the parties in the first action must be identical to the parties in the second action, or they must be in privity with each other, that is, have the same legal rights or interests. In the case at hand, the parties are not identical. The first action involved Larry Singer and Maureen Singer. The second action concerned Jonathan and David Singer and Maureen Brookman (formerly Maureen Singer). However, Larry Singer’s legal rights and interest in the first action are the same as plaintiffs’ rights and interests in the action at hand. In his post-decree petition, Mr. Singer sought and received an accounting of his children’s income and earnings from May 1984 to the present. While Mr. Singer’s rights to such an accounting did accrue pursuant to the dissolution of marriage and the supplemental judgment, his only legal interest in these funds is the same as that of his children, the plaintiffs in the present lawsuit. Mr. Singer had no personal stake in the income of the children, and his sole interest in determining how the monies were in fact used was to protect the interest of his children in those monies. Since the plaintiffs’ interests in the present action are in the use of their income and earnings by their mother, the defendant in both actions, they are indeed the exact same interests as those of Mr. Singer in the prior action, necessitating a determination of privity between Mr. Singer and his children, Jonathan and David.

Plaintiffs argue that the chancery court’s finding of privity is improper based upon the Illinois Supreme Court’s decision in Simcox v. Simcox (1989), 131 Ill. 2d 491, 546 N.E.2d 609. In Simcox, the supreme court considered the issue of whether a subsequent paternity suit brought by a child was barred by a determination of paternity in the dissolution proceeding between her parents. The court held that children are not privies of their parents in dissolution proceedings and, as such, are not bound by findings of paternity in 'such proceedings unless they are parties to the proceedings. (Simcox, 131 Ill. 2d at 497.) The court reasoned that a child’s interests were not properly represented in the dissolution proceeding, and therefore, the court’s decision could not be binding on the child. This case is distinguishable from Simcox, as it does not seek to establish privity with a parent with respect to an issue central to the dissolution itself (such as paternity), in which parent and child may have conflicting interests, but only as to an agreement (the accounting provisions of the supplemental judgment) which was set up solely to benefit the children themselves, and which provided for enforcement by the parent. Furthermore, the trial judge in the post-decree proceeding specifically addressed the issue of the children’s representation and said that he would act to protect the interests of the minor children. It should also be noted that plaintiffs’ attorneys, who previously represented Mr. Singer, agreed that they had no problem with the judge representing the children’s interests in the post-decree litigation.

The case at bar is more factually similar to Palya v. Palya (1980), 87 Ill. App. 3d 472, 409 N.E.2d 133, than it is to Simcox. In Palya, the plaintiffs’ (children’s) mother brought a post-decree enforcement proceeding concerning the children’s rights to certain coins being held for them by their father. After the court determined that the father had misappropriated the coins and ordered the father to make reparations, the children brought suit against their father for an accounting. (Palya, 87 Ill. App. 3d at 492.) The Palya court held that the subsequent action was barred, as the children were the real parties in interest in both cases because the mother had no interests of her own in the coins themselves. Similarly, the Singer boys are the real parties in interest in both the post-decree enforcement case and the current actions for accounting. This identity of interest provides the basis for a finding of privity.

The second element required for a finding of res judicata is identity of subject matter. Plaintiffs maintain that the subject matter of the lawsuits is not the same in that the prior post-decree proceedings were limited to a review of checking account funds and that such review covered a period of time different from that requested by the present chancery action for an accounting. To the extent the initial accounting did not explore funds in investments other than the checking account, held by the mother, there is no reason that it could not have. Res judicata stands as a bar to the relitigating not only the issues which were previously tried, but also those issues which could have been tried. If it had been alleged that all of the children’s earnings were not being deposited to the checking accounts, the court could have looked at other accounts, since it had openly stated that it was acting to protect the interests of the children. Similarly, if the plaintiffs, by and through their father, Larry Singer, had originally filed a complaint sufficient to allege a cause of action under the UTMA, they could have requested an accounting from 1983 to the hearing date as they now do.

Plaintiffs may not bring a second action after the loss of the first merely by limiting the theories of recovery opened by the pleadings in the first action. (Best Coin-Op, Inc. v. Paul F. Ilg Supply Co. (1989), 189 Ill. App. 3d 638, 657, 545 N.E.2d 481, 493.) It is against the principles of public policy as well as res judicata to allow plaintiffs to sue for part of a claim in one action and then to sue for the remainder in another action.

The third element required for a finding of res judicata is identity of cause of action. It is uncontroverted that the post-decree enforcement action, brought by Mr. Singer, and the present actions for an accounting under the UTMA and breach of fiduciary duty are indeed separate and distinct legal theories, requiring different elements of proof. Although the actions rely on different legal theories, each alleges facts for the identical purpose of obtaining a court accounting of the funds being managed by Ms. Brookman on behalf of her children. Our court has held that 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), 189 Ill. App. 3d 638, 652, 545 N.E.2d 481, 490.) Plaintiffs’ actions are really just a different means to the same end and are identical for purposes of res judicata.

We therefore find that parties, subject matter, and causes of action are identical and that the prior action involved a final judgment. The elements of res judicata are therefore satisfied. For this reason, we affirm the trial court’s dismissal of plaintiffs’ claim under section 2 — 619(a)(4).

We also affirm the trial court’s dismissal of plaintiffs’ claims under section 2 — 615. A trial court may grant a motion to strike and dismiss under section 2 — 615 of the Illinois Code of Civil Procedure when a complaint does not contain allegations of fact sufficient to state a cause of action. (Economy Fire & Casualty Co. v. Western States Mutual Insurance Co. (1964), 49 Ill. App. 2d 59, 198 N.E.2d 723.) As the trial judge found, the plaintiffs’ complaint is woefully insufficient. Furthermore, the first requirement in an equitable accounting action is that there is no adequate remedy at law. Since plaintiffs had just had an accounting, they would certainly not be entitled to another one. Furthermore, plaintiffs have failed to allege facts sufficient to implicate either the UTMA or the theory of breach of fiduciary duty. Plaintiffs’ complaint wholly lacks any allegations that a transfer of property was made with reference to the UTMA, as required in sections 3 and 10(a) of the UTMA. Plaintiffs’ allegation that defendant was “their guardian and custodian of their funds pursuant to the Uniform Transfers To Minors Act” is a mere conclusion of law. The fact that defendant was a signatory, and “in control of their savings, checking and investment accounts,” does not establish that these accounts were opened under the UTMA or that they constitute custodial property under the UTMA. Plaintiffs also fail to identify the pertinent accounts for which they are seeking an accounting, including where and when the accounts were opened.

Just as plaintiffs fail to allege sufficient facts to sustain a cause of action under the UTMA, so they also fail to allege facts sufficient to sustain a cause of action under their second count, breach of fiduciary duty. In their complaint, plaintiffs state that Ms. Brookman had a fiduciary relationship with Jonathan and David. This is a conclusion of law and not a factual allegation. Furthermore, it is an incorrect conclusion of law in Illinois, as a fiduciary relationship does not exist between a mother and son as a matter of law in this State. (Chicago Land Clearance Comm’n v. Yablong (1960), 20 Ill. 2d 204, 206, 170 N.E.2d 145, 147.) In order to establish that such a relationship exists, where one does not exist as a matter of law, the facts must clearly indicate a dominant-subservient relationship between the parties. (In re Estate of Kieras (1988), 167 Ill. App. 3d 275, 281, 521 N.E.2d 263, 266.) The only facts offered by plaintiffs in their complaint to support the alleged fiduciary relationship are that Brookman received all their earnings and paid all their expenses, and that she was a signatory in control of their savings, checking, and investment accounts. These facts indicate only that the mother was in a position to control her sons’ accounts, and not that she had any fiduciary duty to deal with these funds in any particular manner. Illinois case law supports the conclusion that in the absence of a specific fiduciary relationship, a parent has the right to the use of a minor child’s earnings and services. (Magee v. Magee (1872), 65 Ill. 255.) Therefore, the trial court’s finding that the plaintiffs’ complaint does not establish any predivorce, that is, pre-May 1984, duty of the mother to deal with the sons’ earnings in any restricted fashion is correct.

Since the plaintiffs’ complaint fails to allege sufficient facts to state a cause of action under either the UTMA or the theory of breach of fiduciary duty, its dismissal by the trial court under section 2 — 615 was proper. Dismissal with prejudice is proper because of the bar created by res judicata.

The trial court awarded sanctions to the defendant pursuant to Supreme Court Rule 137 (134 Ill. 2d R. 137), which requires the court to impose sanctions upon a party and/or their attorneys for filing a pleading unwarranted by existing law and interposed for an improper purpose, such as to harass or needlessly increase the cost of litigation. The purpose of Supreme Court Rule 137, formerly section 2 — 611 of the Illinois Code of Civil Procedure, is to prevent abuse of the judicial process by penalizing the litigant who brings vexatious or harassing actions that are based on false statements or without legal foundation. (In re Application of Cook County Collector (1986), 144 Ill. App. 3d 604, 608, 494 N.E.2d 536.) The allowance of fees and expenses under this provision is entrusted to the discretion of the trial court, and its determination will not be disturbed on review unless there has been an abuse of that discretion. Dayan v. McDonald’s Corp. (1984), 126 Ill. App. 3d 11, 16, 466 N.E.2d 945.

Both plaintiffs and their counsel were well aware of the post-decree dissolution proceedings which fully disposed of the issues which plaintiffs sought to have retried. (In fact, the same counsel represented Mr. Singer in the post-decree action as now represents his sons in the present action.) Counsel never sought to appeal the post-decree judgment, but rather notified defendant (Maureen Brookman) that her sons (plaintiffs in the present lawsuit) were dissatisfied with the results of this litigation and would seek their own court-ordered accounting. Since the present litigation raises neither new issues nor issues which could not have been raised previously, and since plaintiffs and their counsel were on warning by the trial judge that the present litigation might be barred by res judicata, there is no conceivable basis for this action other than to waste the court’s time, generate legal fees, and harass the defendant.

Plaintiffs’ claims that they were denied a hearing on the issue of sanctions and that sanctions imposed are excessive are also without merit. Plaintiffs had the opportunity to respond to defendant’s motion for sanctions in their memorandum filed in response to defendant’s request. Furthermore, plaintiffs’ counsel did specifically address the sanctions issue at the June 9, 1989, hearing. Additionally, there is a line of cases which permits courts to dispense with a hearing where it is apparent from the pleadings that the assertions were made without reasonable cause and found to be untrue. (Beno v. McNew (1989), 186 Ill. App. 3d 359, 365, 543 N.E.2d 533, 537.) Since the trial judge determined that plaintiffs’ action was “unreasonable by every standard,” he was entitled to award sanctions even without a hearing. Furthermore, the amount of the sanctions was not unreasonable, as such amount was determined after a detailed breakdown of fees and expenses by defendant’s counsel. We therefore affirm the trial court’s award of sanctions to defendant.

We also find that sanctions are warranted under recently enacted Supreme Court Rule 375(b) (134 Ill. 2d R. 375(b)), which allows this court to impose an appropriate sanction upon a party or their attorney if it is determined “that the appeal itself is frivolous, or that an appeal was not taken in good faith, for an improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation, or the manner of prosecuting the appeal is for such purpose.” An appeal will be deemed frivolous where it is not reasonably well-grounded in fact and not warranted by existing law as a good-faith argument for the extension, modification, or reversal of existing law. Plaintiffs contend that based on the Illinois Supreme Court’s decision in Simcox, that they had good reason to pursue their appeal. (Simcox, 131 Ill. 2d 491.) However, their misapplication of this case cannot be claimed as a basis for pursuing an appeal which is otherwise baseless and a continuation of the grudge match which was begun in the court below. This appeal is just as mean-spirited and vindictive as the case below and sanctions are likewise appropriate. Since an appropriate sanction under Supreme Court Rule 375(b) may include an order to pay to the other party the reasonable costs of the appeal, including attorney fees, we direct defendant to file a statement of reasonable expenses and attorney fees as a result of this appeal within 14 days. Plaintiff and his attorneys shall have seven days to file a response. This court will then file a supplemental opinion determining the amount of the sanction which will be imposed on plaintiff and his attorney. See Dreisilker Electric Motors, Inc. v. Rainbow Electric Co. (1990), 203 Ill. App. 3d 304, 562 N.E.2d 970.

Accordingly, the judgment of the circuit court is affirmed.

Affirmed.

LORENZ, P.J., and MURRAY, J., concur.

SUPPLEMENTAL OPINION

JUSTICE McNULTY

delivered the supplemental opinion of the court:

In the instant action, the trial judge issued orders on June 9, 1989, and August 29, 1989. The June 9 order granted defendant’s motion to dismiss and awarded sanctions. The August 29 order finally determined the amount of the sanctions.

Singer filed appeals on July 3, July 7 and September 15, 1989. Relying on our supreme court’s decision in Marsh v. Evangelical Covenant Church (1990), 138 Ill. 2d 458, 563 N.E.2d 459, we find that the case under consideration was not ripe for review until August 29, 1989, when the amount of sanctions was finally determined. Consequently, Supreme Court Rule 375 (134 Ill. 2d R. 375), which took effect on August 1, 1989, provides us with the authority to award sanctions on appeal.

Even if Rule 375 had not been in effect at the time of this appeal, we would have awarded identical sanctions pursuant to section 2 — 611 of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1989, ch. 110, par. 2 — 611) although we note that the First District Appellate Court is split as to whether section 2 — 611 applies to sanctions on appeal. See the third divisions’s opinion in In re Marriage of Pituita (1990), 202 Ill. App. 3d 103, 559 N.E.2d 819, and Harris v. Harris (1990), 196 Ill. App. 3d 815, 555 N.E.2d 10, which finds that, in light of Rule 375, section 2 — 611 no longer applies to sanctions on appeal. But see A & A Acoustics, Inc. v. Valinsky (1990), 202 Ill. App. 3d 516, 559 N.E.2d 1180, which relies on Chavez v. Watts (1987), 161 Ill. App. 3d 664, 515 N.E.2d 146, and awards sanctions for a frivolous appeal based on section 2 — 611. See also Beno v. McNew (1991), 213 Ill. App. 3d 720, for the proposition that sanctions for the appeal of frivolous lawsuits may be granted pursuant to section 2 — 611.

Pursuant to our award of sanctions against David Singer and his attorneys, defendant Brookman filed a statement regarding attorney fees and expenses incurred in this appeal. In this statement, Brookman seeks recovery for 61.8 hours of attorney time and 4.5 hours of paralegal time. The attorney time was billed at $185 per hour for six hours and $130 per hour for 55.8 hours for a total of $8,364. The paralegal time was billed at $45 per hour for 4.5 hours for a total of $202.50. Other expenses, including word processing, copying and messenger costs, total $328.49. Thus, Brookman’s total claimed expenses are $8,894.99.

Although David Singer and his attorneys claim that 61.8 hours of attorney time is excessive, we find that it is not. In his response to Brookman’s verified petition for attorney fees, Singer challenges the necessity of time spent for research, telephone discussions and review of motions as well as the expense of two attorneys at oral argument when only one actually presented the appeal. Singer’s arguments about the reasonableness of hours spent in preparation and presentation of Brookman’s claim mirror his trial court argument that Brookman had a duty to mitigate expenses. We find otherwise and conclude, as did the trial judge, that “the proper response to malicious prosecution or careless lawyering is not to respond in-kind with slovenly preparation or half-hearted advocacy; *** but rather to validate our professions’s righteous outrage and indignation over such conduct with meticulous research, careful analysis, expansive writing and aggressive advocacy.”

Accordingly, Brookman is awarded the sum of $8,894.99 for attorney fees and expenses. The plaintiffs’ petition for rehearing is denied without prejudice to their opportunity to refile after the issuance of this supplemental opinion.

LORENZ, P.J., and MURRAY, J., concur.


source: Caselaw Access Project

author: JUSTICE GREIMAN

license: Public Domain

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. EUGENE FONZA, Defendant-Appellant.
    First District (3rd Division)
    No. 1 — 88—0301
    Opinion filed May 15, 1991.
    Rehearing denied August 27,1991.

      Randolph N. Stone, Public Defender, of Chicago (Stephen L. Richards, Assistant Public Defender, of counsel), for appellant.
    John O’Malley, State’s Attorney, of Chicago (Renee Goldfarb, Paul Gliatta, and Joseph J. Higgins, Assistant State’s Attorneys, of counsel), for the People.
   JUSTICE GREIMAN

delivered the opinion of the court:

Following a jury trial, defendant Eugene Fonza was found guilty of murder and attempted armed robbery.

On appeal, defendant contends that his convictions should be reversed and the cause remanded for a new trial on the grounds that the trial court: (1) excluded certified copies of a State witness’ three prior felony convictions indicating not guilty pleas rather than the guilty pleas to which the witness testified; (2) allowed the testimony of an undisclosed rebuttal witness; (3) admitted improper hearsay testimony; and (4) denied the defense the opportunity to provide evidence of a pending charge against a State rebuttal witness.

For the reasons that follow, we affirm the trial court’s judgment.

The victim, Maurice Noland, died of a gunshot wound to the chest. David Johnson, an eyewitness for the State, testified that the shooting occurred at 2 a.m. at a three-story apartment building at the corner of Homan and Grenshaw in Chicago, drugs were being sold out of the second-floor apartment on the back porch and Johnson was standing in line directly behind Maurice to buy cocaine. Charles Houston was also on the second-floor porch at this time. Johnson testified that after Maurice got his package of drugs, he proceeded down the porch stairs but was stopped by defendant. Defendant was holding a gun in his right hand and, with his left hand, was patting the pockets of Maurice’s overcoat. Maurice grabbed defendant, who in turn pushed Maurice away and fired the gun.

Johnson also admitted that he had previously been convicted for theft, sentenced to 18 months’ probation for that crime and that his probation term had been extended for nonreporting and he was still on probation the night Maurice was killed. Moreover, Johnson admitted using marijuana and cocaine on occasion and stated he had used marijuana the day before giving his trial testimony. In addition, Johnson stated that he told Steve Noland, Maurice’s brother, about the events leading to Maurice’s death.

Charles Houston, otherwise known as “B.C.” or “Black Charles,” testified for the State and corroborated Johnson’s testimony concerning the shooting incident. Houston acknowledged that he was present on the second-floor back porch when the shooting took place and testified that defendant held a gun in one hand and was going through the victim’s coat with his other hand, that the victim lunged at defendant, and when defendant pushed the victim away, the gun went off.

After the shooting, Houston went to Jessie Flowers’ house, which was known as a “shooting gallery.” Houston testified that defendant also appeared at Flowers’ house and asked Houston if the man he shot was still alive. Houston then had a conversation with Debbie Hargrove, also known as “Cynthia,” who was also present at Flowers’ house. Houston told Hargrove that a shooting had occurred at the apartment occupied by her boyfriend, Michael Johnson, and asked Hargrove to find out if the victim was alive. He also testified that he did not tell Hargrove the identity of the assailant.

Charles Houston, then 31 years old, admitted that he had been using drugs off and on since age nine, had been incarcerated in prison about five times, and was on parole at the time of the trial. Houston stated, “I’m a crook” and “I’ve been in and out of jail most of my life.”

During direct examination, Houston responded affirmatively when asked whether he had pled guilty to robbery in 1974, to unlawful use of a weapon in 1975, and to armed robbery in 1979. He further acknowledged that he had been convicted of unlawful use of a weapon in 1985.

On cross-examination, defense counsel attempted to show that Houston had pled not guilty to all his prior crimes. However, the trial court sustained an objection by the State and ruled that the attempted impeachment was a collateral issue.

Debbie Hargrove testified on behalf of defendant and stated that, while at Flowers’ house, Houston admitted he had done the shooting at her boyfriend’s apartment. Hargrove testified that later that evening she had a conversation with Ronald Banks and another man known as Pimp near Johnson’s apartment. Hargrove testified that she told Banks what Houston had told her but denied ever telling Banks that she had seen the shooting.

At the close of defendant’s case, defense counsel moved for a directed verdict, arguing that the State’s case contained inconsistencies including Johnson’s testimony that he had told Steve Noland, the vietim’s brother, about the shooting and yet no evidence was presented regarding that information.

On rebuttal, the trial court allowed the State to call Rosie Noland, the mother of the victim and Steve Noland, as a witness. Defense counsel objected on the grounds that calling her as a witness would violate the order excluding witnesses since she had been present in the courtroom during the trial. The State maintained that Ms. Noland would explain the absence of Steve Noland at the trial. The trial judge overruled defense counsel’s objections and stated that defense counsel had made Steve Noland’s absence an issue.

Rosie Noland testified that a few days after her son Maurice had been killed, Steve Noland fell down some stairs, hit his head and was admitted to a hospital for more than a month. Ms. Noland further testified that Steve has a bad memory, declined to talk to anyone about his brother, and was partially disabled.

Also in rebuttal, Ronald Banks testified that Debbie Hargrove told him that she had seen Houston shoot the victim on the back porch. Banks admitted that he had been convicted of forgery and was currently on probation for that offense. Banks denied being arrested in 1987 under the name of Steven Banks for possession of a controlled substance and testified that the only matter pending against him was a traffic case in Oak Park. The trial court denied defense counsel the opportunity to present extrinsic evidence in an attempt to show a Ronald Lewis Banks and a Steve Banks to be the same person as this witness. The trial court ruled that such information was a collateral issue and did not involve a question of credibility.

Defendant asserts that the certified copies of Houston’s felony convictions were admissible to attack Houston’s credibility. If the jury had been cognizant of Houston’s past pleas of not guilty through the certified copies of his prior convictions, defendant maintains that the jury may have reached a different conclusion. We disagree.

Well-established standards provide that the latitude allowed on cross-examination rests largely in the sound discretion of the trial court, and a reviewing court should not interfere unless there has been a clear abuse of discretion resulting in manifest prejudice to the defendant. (People v. Collins (1985), 106 Ill. 2d 237, 269.) Since an obvious purpose of cross-examination is to test the credibility of the witness, any permissible kind of impeachment material is generally allowed, but a cross-examiner may not impeach a witness on a collateral matter. (Collins, 106 Ill. 2d at 269.) The test to determine whether a matter is collateral is whether it could be introduced for any purpose other than to contradict. Collins, 106 Ill. 2d at 269; People v. Wadley (1988), 169 Ill. App. 3d 1036, 1046.

The importance attached to a plea of guilty is derived from the dubious assumption of veracity inherent in an accused’s admission of guilt. Conviction subsequent to a not guilty plea apparently does not suggest to the jury that the witness has the same respect for the truth as a guilty plea. (See People v. Reppa (1982), 104 Ill. App. 3d 1123, 1128 (a plea of guilty shows that when a person was in fact guilty, he admitted it).) However, in Reppa, the defendant was prevented from testifying that he had entered guilty pleas in prior criminal cases. This court held that Reppa’s conviction would not be reversed even if it was error to exclude the proffered testimony that his prior convictions resulted from guilty pleas, since it could not have so bolstered his credibility as to cause a different outcome.

The record in the present case reveals that Houston testified quite extensively about his criminal background, his parole status, and continued drug use. Houston specifically testified that he had four prior felony convictions, was high only a few hours before Maurice Noland was fatally shot, was present on Michael Johnson’s back porch to buy cocaine, had been a member of a gang called the Black Gangster Disciples, was still using heroin and cocaine at the time of trial, and was a “crook” who had “been in and out of jail most of [his] life.” The jury had more than ample evidence available to determine Houston’s credibility. While admission of the material might have been appropriate, we do not believe the trial court abused its discretion in excluding the certified copies of his prior convictions.

Defendant also contends that Rosie Noland’s testimony was inadmissible as improper rebuttal because it did not concern any evidence introduced during the defense case in chief and the State had no right to rebut statements made by defense counsel to the trial judge outside the hearing of the jury. Defendant further argues that Ms. Noland’s appearance violated the trial court’s order of exclusion since she had been present in the courtroom during trial and also violated Supreme Court Rule 412(d) (134 Ill. 2d R. 412(d)), which requires the State to give defendant at least seven days’ notice, or such other time as the court may direct, of witnesses whom the State intends to call in rebuttal.

Admission of rebuttal testimony is within the sound discretion of the trial court, and its decision will not be reversed absent a showing of abuse of discretion. (People v. Rios (1986), 145 Ill. App. 3d 571, 584.) In the State’s case in chief, David Johnson testified that he told Steve Noland about the shooting of Maurice. Since the State presented no further evidence on this matter, defendant argued in his motion for directed verdict that the State’s case contained “grave inconsistencies.” The State sought to explain Steve Noland’s absence through the rebuttal testimony of his mother. In allowing Ms. No-land’s testimony, the trial court noted that defendant had made an issue of Steve Noland’s absence and later observed that Ms. Noland’s testimony failed to effectively contribute anything to the case. Accordingly; the trial court did not abuse its discretion by allowing the testimony of Ms. Noland.

In assessing the effect of the court’s violation of its own order excluding witnesses, the court will be required to weigh whether the witness’ testimony is changed or affected by hearing the testimony, argument or opening statement of counsel. It is clear that this defendant has not been prejudiced by this rather unremarkable testimony. Absent a showing of prejudice, the judgment of the trial court will not be disturbed. People v. King (1985), 140 Ill. App. 3d 937, 940.

Regarding the disclosure of a witness, this court has held that the critical element is the State’s intent, and until it forms an intent to call a person as a witness, there need be no disclosure. (People v. Hine (1980), 89 Ill. App. 3d 266, 267.) Rebuttal witnesses, more often than not, are brought to defense counsel’s attention after defendant has rested. The State cannot anticipate the use of a rebuttal witness until the defendant gives some indication as to the nature of defense that will be advanced at trial. Hine, 89 Ill. App. 3d at 269.

Defendant next asserts that Rosie Noland’s testimony was inadmissible as hearsay. Defendant specifically points to Ms. Noland’s testimony that Steve “don’t want to talk about his brother,” that he “just wants to black it out,” and that “he has a real bad memory.”

Hearsay is testimony of an out-of-court statement which is offered to establish the truth of the matter asserted. However, out-of-court statements may be admissible when used for the purpose of showing the state of mind of the declarant at the time the declaration was made. Heller v. Jonathan Investments, Inc. (1985), 135 Ill. App. 3d 350, rev’d on other grounds (1986), 113 Ill. 2d 60; Lundberg v. Church Farm, Inc. (1986), 151 111. App. 3d 452.

In addition, a witness may properly testify regarding matters of which the witness has personal knowledge. People v. Lewis (1986), 147 Ill. App. 3d 249, 257 (the testimony of a mother concerning her minor daughter’s understanding of the meanings of certain words was admissible).

Ms. Noland essentially testified as to her son Steve’s physical condition, stating that he had fallen down her basement stairs and suffered head injuries. She described the continuing disabilities which afflict Steve as a result of his accident and his state of mind relating to his brother’s violent death. Some authorities argue that a declaration of a person’s then-existing state of mind is an exception to the hearsay rule, while others urge that such declarations are just not hearsay statements. (Lundberg v. Church Farm, Inc. (1986), 151 Ill. App. 3d 452; M. Graham, Cleary & Graham’s Handbook of Elinois Evidence §803.4 (4th ed. 1984).) Since Ms. Noland is relating impressions that show Steve’s state of mind, her testimony did not constitute hearsay and was properly received in evidence.

Defense witness Debbie Hargrove contradicted the testimony of one of the State’s key occurrence witnesses. In rebuttal, the State offered the testimony of Ronald Banks to refute the testimony of Debbie Hargrove. Banks admitted that he had been convicted of forgery, was on probation for that offense, was present at Michael Johnson’s apartment at the time of the shooting, was aware that Michael Johnson was selling drugs from the apartment and fled the scene after the shooting.

Defendant contends that Banks was the subject of a pending charge for possession of a controlled substance at the time of trial and sought to introduce the criminal history (“rap sheet”) of a person named Ronald Lewis Banks, birth date April 22, 1960, which noted a controlled substance charge against a person named Steve Banks, birth date May 23,1962.

Defendant sought to establish that the State’s rebuttal witness was the same person, Steve Banks, noted in the Ronald Lewis Banks “rap sheet” and that the jury should be apprised of this matter to weigh the credibility of the witness’ testimony.

Banks testified that he was born on April 22, 1961, and denied that he had ever used the name Steve Banks. Defendant then requested, and was refused, an opportunity to subpoena police officers who might identify the witness Banks as Steve Banks.

It is well established in Illinois that a showing of bias on the part of a witness is an accepted method of impeachment. A defendant is entitled to have the trier of fact informed as to any promises of leniency that may have been made to a witness relating to pending charges against such witness. People v. Wilkerson (1981), 87 Ill. 2d 151; People v. Eddington (1979), 77 Ill. 2d 41; People v. Norwood (1973), 54 Ill. 2d 253; People v. Mason (1963), 28 Ill. 2d 396.

It is critical that the trier of fact have an opportunity to hear the evidence of pending charges and determine for itself that no leniency has been offered in return for favorable testimony. In the Eddington case, the trial court determined, after an examination of the witness outside the presence of the jury, that the prosecution had not offered any leniency on a pending drug charge. The supreme court reversed, however, concluding that the jury must have an opportunity to consider the subliminal influence that could be exerted by the pendency of a pending criminal charge.

In all of the cited cases, the existence of the pending charge against the witness is not at issue. Hence, these cases are distinguishable from the facts of the case at bar. Here there is a factual question as to whether the witness Ronald Banks is, in fact, Steven Banks or Ronald Lewis Banks and whether any charges have been lodged against this witness.

The issue of bias is so fundamental it cannot be deemed collateral. However, the issue of whether there is a nexus between the witness and a pending charge against one with the same last name would seem to be a collateral issue. Evidence which is intended to show bias must be direct and positive, not remote or uncertain. People v. Davis (1990), 193 111. App. 3d 1001,1004.

Defendant’s link between the State’s rebuttal witness and the person actually charged with the possession of a controlled substance is tenuous. At best, the three persons involved share a common last name although differing birth dates.

Even counsel for the defense does not maintain that Ronald Banks, Steven Banks, and Ronald Lewis Banks are the same person. Instead, counsel seeks to bring in additional witnesses to identify whether or not they could be the same person. In addressing the trial court, counsel makes it clear that he has no opinion as to whether the three persons share a common identity and states:

“MR. KING: Judge as you know from your vast experience, people that are under arrest often lie for various reasons, whatever reasons, it doesn’t matter, but I would ask that that witness be brought back so that arresting Officer McBride, I think his name is — McLane, can say whether or not that’s the fellow that he arrest[ed] and whether or not he gave the name Steve Banks and whether or not he had been arrested for possession of controlled substance.
THE COURT: Why?
MR. KING: Because, if that’s the case then apparently he lied on the witness stand.”

Counsel does not affirmatively allege that the witness is the same person against whom the charges are pending. Instead he appears to be on a fishing expedition with nothing except a common last name to raise the court’s curiosity. If that were enough, criminal trials of persons with relatively common names would be protracted, out-of-focus events separated from the substance of the case by a wall of collateral issues.

While the issue of bias is one of substance and not collateral, the issue of whether there is a nexus between the witness and the pending charge is collateral.

A cross-examiner may not impeach a witness on a collateral matter, but must accept the witness’ answer. People v. Collins (1985), 106 Ill. 2d 237, 269.

A collateral matter has been defined as one irrelevant to the substantive issues. (People v. Buckner (1984), 121 Ill. App. 3d 391, 398-99.) The test to determine whether a matter is collateral is whether it could be introduced for any purpose other than to contradict. (Collins, 106 Ill. 2d at 269-70; People v. Wadley (1988), 169 Ill. App. 3d 1036, 1046.) The trial court is vested with broad discretion when applying this collateral test. Collins, 106 Ill. 2d at 269-70; Wadley, 169 Ill. App. 3d at 1046.

We have previously noted that a defendant is allowed wide latitude in cross-examining witnesses for bias or a motive to testify falsely. A pending criminal complaint would certainly be classified as an ample motive to give false testimony, and the cases cited here have made it clear that the jury is entitled to be apprised of such pending charges in order to determine the credibility of the witness. (People v. Eddington (1979), 77 Ill. 2d 41; People v. Norwood (1973), 54 Ill. 2d 253; People v. Mason (1963), 28 Ill. 2d 396.) However, a separate and distinct line of cases has developed a different rule where the witness is the subject of a mere investigation. While it is proper to cross-examine a witness about a pending charge to show bias, the scope of such cross-examination does not extend to a mere investigation of a crime. (People v. Lawson (1990), 193 Ill. App. 3d 396; People v. Simmons (1981), 99 Ill. App. 3d 519, aff’d (1982), 93 Ill. 2d 94; People v. Bingham (1979), 75 Ill. App. 3d 418.) The case at bar falls within a third category: Does the defense have the right to cross-examine a witness where it is unclear that the pending charge relates to that witness? We believe that the alleged pending charge is collateral to the issues of the case and is more compatible with the second category which limits the scope of cross-examination.

The case at bar also differs dramatically from the allegedly biased witnesses in the cited cases. In Mason, the witness was the State’s only witness, and in Wilkerson, the testimony of the witness was the linchpin of the State’s case. In the case at bar, the witness is called in rebuttal to cast some vague shadows on the testimony of a defense witness.

Error in restricting the cross-examination of a witness whose testimony serves merely to buttress the prosecution, such as in this case, may be deemed harmless error. (People v. Bingham (1979), 75 Ill. App. 3d 418.) Since Banks’ testimony is hardly crucial to the prosecution’s case, a reversal is not warranted.

For all of the reasons stated, judgment of the circuit court of Cook County is affirmed.

Affirmed.

RIZZI and WHITE, JJ., concur.


author: JUSTICE LaPORTA

text:
    IMPORT SALES, INC., Plaintiff, v. CONTINENTAL BEARINGS CORPORATION, Defendant-Appellant (Treesdale, Inc., Defendant; Ray E. Hicks et al., Third-Party Defendants-Appellees).
    First District (6th Division)
    No. 1 — 89—1312
    Opinion filed May 17, 1991.
    Rehearing denied August 8, 1991.
    Modified opinion filed August 16,1991.

      Martin, Craig, Chester & Sonnenschein, of Chicago (Don R. Sampen and William A. Kummerer, of counsel), for appellant.
    Braun & Rivkin, Ltd., of Chicago (Ira N. Helfgot, of counsel), for appellees.
   JUSTICE LaPORTA

delivered the opinion of the court:

This is defendant’s interlocutory appeal from the trial court’s order of April 18, 1989, which granted the Walter Glass and Ray Hicks section 2 — 615 motions to dismiss Continental’s third-party complaint pursuant to section 2 — 406(b) of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, pars. 2 — 615, 2 — 406(b)) and striking Continental’s second amended counterclaim against Import. In its notice of appeal defendant requests that this court (1) vacate or reverse the April 18 order thereby allowing Continental’s amended third-party complaint to stand, or, in the alternative, to allow Continental to file an amended third-party complaint seeking indemnification from Glass and Hicks, and (2) allow Continental’s counterclaim against Import to stand, or, in the alternative, to allow Continental leave to file a counterclaim against Glass and Hicks on the theory that they are the alter ego of Import.

In response Glass contends that the April 18 order was proper and should be affirmed. The April 18 order recites in pertinent part “IT IS ORDERED: (1) that Hicks’ and Glass’ motions to dismiss under [section] 2 — 406(b) of the Code of Civil Procedure are sustained and that CBC’s amended third-party complaint be and is hereby dismissed pursuant thereto with prejudice. (2) It is the express finding of this court, pursuant to Supreme Court Rule 304(a) that there is no just reason for delaying enforcement or appeal of this order with respect to the dismissal of the amended third-party complaint pursuant to section 2 — 406.”

Glass contends that Continental has waived or forfeited its right to appeal three of the four issues raised. Continental has waived the failure of the trial court to permit further amendment of the third-party complaint to seek indemnification because defendant did not request leave to amend. Continental may not appeal the dismissal of its amended counterclaim because it did not request leave to amend to allege an alter ego theory of liability as to Hicks and Glass. Continental may not appeal the order striking the counterclaim against Import since it was not final and appealable and Continental was given leave to replead. Glass contends, therefore, that only the dismissal of the third-party complaint with prejudice is the subject of this appeal.

Hicks contends that the sole issue presented for review is whether the trial court erred in dismissing the third-party complaint of Continental against Hicks and Glass pursuant to section 2 — 615 (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 615) for failing to conform to the requirements of section 2 — 406(b) (Ill. Rev. Stat. 1987, ch. 110, par. 2— 406(b)). Import Sales, Inc., brought suit against Continental Bearings Corporation and its parent company, Treesdale, Inc., for breach of a contract and breach of a subsequent settlement agreement and for compensatory and exemplary damages. Continental filed a combined counterclaim against Import and a third-party complaint against Hicks, subsequently amended to include Glass. The trial court dismissed Continental’s amended third-party complaint with prejudice on the section 2 — 615 motion of Hicks and Glass pursuant to section 2— 406(b) of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, pars. 2 — 615, 2 — 406(b)) on the ground that the pleading was not a proper third-party complaint.

Continental appealed and expands the issues for our determination to the following considerations: (1) whether the claims alleged against the individual defendants Hicks and Glass in the third-party complaint should have been considered a counterclaim under Illinois Code of Civil Procedure sections 2 — 608 and 2 — 614(a) (Ill. Rev. Stat. 1987, ch. 110, pars. 2 — 608, 2 — 614(a)), because these defendants were the alter egos of the original plaintiff corporation; (2) whether Continental’s counterclaim was sufficiently related to the plaintiff’s claim to be maintained as a third-party complaint under section 2 — 406(b) (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 406(b)); (3) whether Continental’s amended counterclaim sufficiently alleged a claim for indemnity or contribution to meet the requirements of section 2 — 406(b) as a third-party action; (4) whether Hicks and Glass are necessary parties to the action; and (5) whether the trial court erred in dismissing the amended counterclaim and third-party complaint with prejudice.

The complaint filed by Import against Continental and Treesdale alleged that on October 28, 1985, Import agreed to purchase from Continental a large quantity of ball bearings for the price of $240,000, and that the purchase price was paid on that date; that Continental was to segregate and warehouse the bearings without additional cost to Import; that from time to time Continental would sell the bearings at a price that would result in a profit to Import and recoupment of Import’s initial investment within “a few months”; that Continental would give first priority to resale of these bearings; if Import’s investment was not recouped within “a few months,” Import reserved the right to remove the bearings or to require Continental to repurchase them at their price plus a profit and interest.

The complaint further alleged that from time to time the bearings were sold but no payment was made to Import. Upon repeated demand by Import, Continental provided an accounting in July 1986, and thereafter Import demanded either payment or delivery of the bearings. Continental agreed to deliver the bearings but Treesdale, as the parent company and new owner, directed Continental to retain them. Import alleged that Continental advised plaintiff that Treesdale directed Continental to change the original agreement on the company books to reflect a $240,000 advance by Import to Continental in lieu of a purchase agreement and that plaintiff believed this was done to obtain financing using the bearings as security for a loan to Continental. Import contends it did not agree to a rescission of the original contract. In August or September 1986, Continental proposed to settle the claim by paying Import on or before September 26 an amount equal to the purchase price plus interest due plus $48,000, if plaintiff would withhold filing suit and Import agreed to these terms. Nothing was paid, no bearings were returned and plaintiff filed suit, seeking in count I a judgment against both defendants for $320,000 plus additional interest from February 28, 1987, as compensatory damages for breach of contract, and in count II, a judgment against Treesdale for an additional $15,000 in exemplary damages based on defendant’s alleged malicious conversion of the bearings and sale proceeds, its inducement of Continental to breach its contract with plaintiff, and misrepresentation as to the settlement agreement.

Continental and Treesdale filed a motion to dismiss the complaint and also filed an answer of general denial of plaintiff’s claim and raised four affirmative defenses, alleging (1) that Ray Hicks, as president of Continental at all times relevant and until April 1987, and as a shareholder of Import, was guilty of a conflict of interest and breach of fiduciary duty in that he actively participated in a plan of corporate waste, self-dealing, mismanagement and diversion of corporate business opportunities from Continental to Import; (2) that Hicks and Import fraudulently concealed his interest in Import to induce Continental to rely on Hicks to its detriment, as a result of which Continental was defrauded and damaged; (3) that Hicks advised Continental that he had personally paid off the $240,000 by virtue of loans he had obtained, and therefore his statement was an admission against the interests of Import and the amount was no longer due and owing to plaintiff; (4) that the transactions complained of are barred by the Statute of Frauds (Ill. Rev. Stat. 1987, ch. 59, par. 1 et seq.); and, therefore, that Import’s recovery was barred for all of these reasons.

In addition to its answer to the complaint, Continental filed a combined counterclaim and third-party complaint against Import and Hicks which pleading was stricken on plaintiff’s motion. By subsequent amendments Continental filed its amended counterclaim and third-party complaint against Import, Hicks and Glass, wherein Continental alleged a conspiracy by Import, Ray Hicks and Walter Glass to defraud Continental and to divert corporate business opportunities from Continental to Import, which alleged conspiracy spanned the years 1977 to 1987. The counterclaim and third-party complaint alleged numerous specific instances of improper and unauthorized conduct by Hicks, including but not limited to the underlying $240,000 transaction on which the original complaint is based and alleged that all such conduct was undertaken by Import, Hicks and jointly by Hicks and Glass as Import’s alter ego with intent to injure Continental and to effectively destroy Continental as a viable business entity. The prayer of the combined amended counterclaim and third-party complaint sought an accounting, compensatory and punitive damages and the imposition of a constructive trust in favor of Continental on the profits of Import and on the interest paid by Continental to Import, Hicks and Glass.

Import and Glass filed motions to dismiss the amended counterclaim and amended third-party complaint under section 2 — 619 as an action not commenced within the statute of limitations period, under section 2 — 615 for legal insufficiency, and under section 2 — 406(b) for a third-party complaint exceeding the claim of the underlying complaint. (Ill. Rev. Stat. 1987, ch. 110, pars. 2-615, 2-619, 2-406(b).) Hicks separately moved to dismiss the amended counterclaim and amended third-party complaint on similar grounds. Continental filed its response and all parties filed supporting memoranda.

Following a hearing on April 4, 1989, the trial court struck Import’s and Glass’ section 2 — 619 motions to dismiss without prejudice “depending on the resolution of the 2 — 615 motion to dismiss.” On April 18, 1989, following a hearing, the trial court granted the Hicks and Glass section 2 — 615 motions to dismiss under section 2 — 406(b), the court ordered that the amended third-party complaint was dismissed with prejudice and that ruling was made final and appealable under Supreme Court Rule 304(a) (134 Ill. 2d R. 304(a)). The motions to strike the amended counterclaim under section 2 — 615 were granted with Continental given leave to replead.

Continental has appealed the trial court’s section 2 — 615 dismissal of its amended third-party complaint with prejudice on section 2— 406(b) grounds.

The record discloses that thereafter Continental on May 19, 1989, filed a seven-count second amended counterclaim in the original action against Import and a separate suit (89 — L—07875) against Hicks and Glass alleging in 10 counts their scheme to fraudulently divert Continental’s assets and corporate opportunities. Glass moved to dismiss the later suit on the ground that, because the counterclaim alleges that he and Hicks are alter egos of Import, there already existed a suit between the same parties on the same issues in the original litigation contrary to section 2 — 619 of the Illinois Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 619). Hicks filed his separate motion to dismiss on similar grounds. Thereafter Continental filed its motion to consolidate the new action with the original action and counterclaim, and objections to the consolidation motion were filed.

On November 9, 1989, while this appeal was pending and after responsive briefs were filed by Hicks and Glass, the trial court granted the motion to consolidate the pending action (87 — L—03984) with the complaint subsequently filed (89 — L—07875), thus joining all the claims of the parties against each other into one suit. The court denied the motions to dismiss in the later-filed suit based on another action pending under section 2 — 619. These pleadings are not at issue in this appeal.

The posture of the case now appears to be that Continental has abandoned its attempt to proceed against Import, Hicks and Glass jointly in a third-party complaint alleging 10 years of wrongdoing by them intended to destroy Continental as a viable business entity by its filing of a separate complaint in a new cause of action alleging the same conduct against Hicks and Glass, and by amending its counterclaim against Import only in the original suit. In its reply brief here Continental contends that, when the court was asked by Glass’ attorney whether the denial of motions to dismiss the later-filed complaint and the entry of an order consolidating the two cases rendered this appeal moot, the trial court responded that the appeal would not be mooted.

Continental submits that the appeal is not mooted for two reasons: first, Hicks or Glass could attempt an interlocutory appeal from the November 9, 1989, order of consolidation and denial of motions to dismiss, and, second, the order dismissing the amended third-party complaint with prejudice under section 2 — 406(b) clouds Continental’s right to proceed under the 1989 complaint. We agree that the dismissal of the amended third-party complaint with prejudice creates a question as to its res judicata effect on the later-filed litigation, subsequently consolidated with the original suit.

We initially note that when faced with a motion to strike and dismiss brought under either section 2 — 615 or section 2 — 619 (Ill. Rev. Stat. 1987, ch. 110, pars. 2 — 615, 2 — 619), the trial court must take all well-pleaded allegations in the complaint as true. Skinner v. Reed-Prentice Division Packing Machinery Co. (1977), 70 Ill. 2d 1, 14, 374 N.E.2d 437, 442, cert, denied (1978), 436 U.S. 946, 56 L. Ed. 2d 787, 98 S. Ct. 2849; Coughlin v. SeRine (1987), 154 Ill. App. 3d 510, 513, 507 N.E.2d 505, 508; Evans v. Control Products Corp. (1979), 73 Ill. App. 3d 681, 684, 392 N.E.2d 239, 241; Burke v. Sky Climber, Inc. (1973), 13 Ill. App. 3d 498, 501, 301 N.E.2d 41, 44, aff’d (1974), 57 Ill. 2d 542, 316 N.E.2d 516.

Here we are concerned only with the propriety of the section 2— 615 dismissal based on the grounds that the amended counterclaim/ third-party complaint failed to conform to the requirements of section 2 — 406(b). Ill. Rev. Stat. 1987, ch. 110, pars. 2 — 615, 2 — 406(b).

Continental’s attempt to file an appropriate counterclaim against Import and an appropriate third-party complaint against Hicks and Glass resulted in a hybrid pleading which did not delineate where the counterclaim left off and the third-party complaint went forward. In its all-inclusive allegations Continental charged Import, Hicks and Glass with many breaches of contract, fiduciary duty and fraud over a long period of time. While Continental may bring a counterclaim for any and all claims it might have against plaintiff Import, the strictures as to what Continental might allege against nonplaintiffs Hicks and Glass are limited to a third-party action for contribution or indemnity on the original Import claim and no other.

The amended counterclaim and third-party complaint alleges throughout that Hicks acted as president of Continental and that he breached his fiduciary duty to his employer over a 10-year period. The pleading alleges the formation and subsequent incorporation of Import by Glass and Hicks and concludes therefrom that “Glass and Hicks consequently are the alter egos of Import with respect to the matters alleged” and are as liable to Continental as Import is liable.

Continental contends that Hicks and Glass are alter egos of Import and cites McCracken v. Olson Cos. (1986), 149 Ill. App. 3d 104, 109, 500 N.E.2d 487, for its proposition that as alter egos of Import the identities of Import, Hicks and Glass merged. Therefore, by filing the Import complaint, Hicks and Glass were parties plaintiff from the start. Defendant argues that because the individuals were original parties, Continental can assert any and all claims against them under section 2 — 614(a) by way of counterclaim without limitation, and they need not be brought into the litigation individually by a third-party complaint limited to the original controversy as defined by Import’s complaint.

Continental concludes that the dismissal of the third-party defendants and more specifically of Hicks and Glass from the litigation was error.

The Illinois Code of Civil Procedure provides at section 2— 608(a) that “[a]ny claim by one or more defendants against one or more plaintiffs, or against one or more codefendants *** may be pleaded as a cross claim in any action, and when so pleaded shall be called a counterclaim.” (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 608(a).) Section 2 — 614 provides: “(a) *** the defendant may set up in his or her answer any and all cross claims whatever, whether in the nature of recoupment, setoff or otherwise, which shall be designated counterclaims.” (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 614 (a).) Accordingly, the counterclaim filed by Continental may only be directed against Import or Continental’s codefendant Treesdale, and may include “any and all cross claims whatever.”

We first consider Continental’s argument that as the alter egos of Import, Hicks and Glass are necessary parties and their joinder and presence is required for a complete determination of all controversies between Import and Continental/Treesdale. Continental cites in support the cases of In re Application of Busse (1986), 145 Ill. App. 3d 530, 535, 495 N.E.2d 1188, Zurich Insurance Co. v. Ray-mark Industries, Inc. (1986), 144 Ill. App. 3d 943, 494 N.E.2d 630, and Ragsdale v. Superior Oil Co. (1968), 40 Ill. 2d 68, 237 N.E.2d 492. A necessary party is one with a present, substantial interest in the subject matter of the litigation without whose participation a complete resolution cannot be had. Chariot Holdings, Ltd. v. Eastmet Corp. (1987), 153 Ill. App. 3d 50, 61, 505 N.E.2d 1076; Brumley v. Touche Ross & Co. (1984), 123 Ill. App. 3d 636, 643-44, 463 N.E.2d 195, 201.

Hicks is alleged to have acted as president and registered agent of Continental and as such representative is alleged to have knowledge of facts affecting the litigation. The complaint alleges no such knowledge or relationship on the part of Glass. Continental’s only argument for inclusion of Glass in this suit is the fact that he was president of Import and together with Hicks owned all the stock of the plaintiff corporation.

Hicks contends that a necessary party is one who has a present, substantial interest in the matters being litigated and without whose presence resolution of the controversy cannot be achieved without affecting that interest. (Chariot Holdings, Ltd. v. Eastmet Corp. (1987), 153 Ill. App. 3d 50, 61, 505 N.E.2d 1076.) He argues that the $240,000 transaction was between Import and Continental. He suggests that the necessary party and the alter ego arguments of Continental are efforts to use selected provisions of the Illinois Code of Civil Procedure to override the requirements of section 2 — 406(b), which was rejected by the court in Ketcham v. Consolidated Rail Corp. (1986), 146 Ill. App. 3d 196, 201, 496 N.E.2d 1104.

Glass responds to the “necessary parties” argument with the observation that the argument assumes that Continental will be able to pierce the corporate veil which requires proof rather than the mere allegation of an alter ego relationship. Glass also contends that, even if the alter ego relationship exists, nonjoinder of Hicks and Glass would not be reversible error since their individual interests would be adequately represented by Import. Central National Bank v. Fleetwood Realty Corp. (1982), 110 Ill. App. 3d 169, 441 N.E.2d 1244.

We reject Continental’s argument that Hicks and Glass were original parties. The original parties to the controversy as framed by the complaint were Import as plaintiff and Continental and Treesdale as defendants. Hicks and Glass, then, are new parties to be added in strict compliance with the appropriate statutory requirements of the Illinois Code of Civil Procedure.

Where new parties, deemed by defendant to be necessary parties, are to be added, section 2 — 405 provides that new interested or necessary parties may be added:

“(a) Any person may be made a defendant who, either jointly, severally or in the alternative, is alleged to have or claim an interest in the controversy, or in any part thereof, or in the transaction or series of transactions out of which the controversy arose, or whom it is necessary to make a party for the complete determination or settlement of any question involved therein, or against whom a liability is asserted either jointly, severally or in the alternative arising out of the same transaction or series of transactions, regardless of the number of causes of action joined.” Ill. Rev. Stat. 1987, ch. 110, par. 2 — 405(a).

Continental alleges it was error for the trial court not to require Hicks and Glass to remain in the suit. Defendant as third-party plaintiff alleged in its pleading that Hicks and Glass as incorporators of Import are the alter egos of the corporation and as such are necessary parties.

The mere formation of a corporation does not support the legal conclusion that its incorporators and/or shareholders, officers or directors are alter egos of the corporation. One of the primary purposes of doing business as a corporation is to insulate shareholders from unlimited liability for corporate activity. (CM Corp. v. Oberer Development Co. (7th Cir. 1980), 631 F.2d 536.) Stock ownership by itself by another entity in and of itself does not create an identity of interest between the two as an alter ego even where the corporation is closely held. (Central National Bank v. Fleetwood Realty Corp. (1982), 110 Ill. App. 3d 169, 181, 441 N.E.2d 1244.) A corporation is a legal entity that exists separate and apart from its shareholders, directors and officers. Main Bank v. Baker (1981), 86 Ill. 2d 188, 204, 427 N.E.2d 94, 101.

The corporate identity will be disregarded and the veil of limited liability pierced only where it is necessary to do so to protect private rights or when the corporation is merely the alter ego or the business conduit of the governing or dominant personality. (Macaluso v. Jenkins (1981), 95 Ill. App. 3d 461, 464, 420 N.E.2d 251; McCracken v. Olson Cos. (1986), 149 Ill. App. 3d 104, 109, 500 N.E.2d 487; Froehlich v. Froehlich (1981), 93 Ill. App. 3d 179, 183, 416 N.E.2d 1134; Berlinger’s, Inc. v. Beefs Finest, Inc. (1978), 57 Ill. App. 3d 319, 325, 372 N.E.2d 1043.) To justify piercing the corporate veil, there must be such unity of ownership interest that to adhere to the separate corporate existence would sanction a fraud. Maealuso, 95 Ill. App. 3d at 464.

Where defendant contends that parties not named in the original complaint as plaintiff or defendant (here parties other than Import, Continental and Treesdale) are necessary participants to achieve a complete determination of the matter in controversy, they shall be added by the filing of a third-party complaint, and such newly added party shall be served with process. (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 406(b).) Section 2 — 406(b) specifically provides “a defendant may by third-party complaint bring in as a defendant a person not a party to the action who is or may be liable to him or her for all or part of plaintiffs claim against him or her.” Ill. Rev. Stat. 1987, ch. 110, par. 2 — 406(b).

Glass contends that he raised two bases for his objection to the amended pleading in the trial court: (1) that the amendment was an entirely separate and independent claim; and (2) that the amendment did not seek indemnity or contribution from Hicks and Glass. He argues further that Continental did not seek leave to amend its counterclaim to allege they were alter egos of Import. He cites Main Bank v. Baker (1981), 86 Ill. 2d 188, 204, 427 N.E.2d 94, for the principle that a corporation is a separate and distinct legal entity from its shareholders, directors and officers. Glass contends that Continental misconstrues the McCracken case when he proposes that by merely alleging an alter ego relationship among Import, Hicks and Glass, their identities are merged and therefore they are “original parties” to the suit and the pleading is properly a counterclaim against them. (Mc-Cracken v. Olson Cos. (1986), 149 Ill. App. 3d 104, 109, 500 N.E.2d 487.) Glass argues that more is required. Only when a corporation is found to be merely the alter ego or business conduit of a controlling or dominant personality will the veil of limited liability be pierced and the corporate identity disregarded. McCracken, 149 Ill. App. 3d at 109.

Hicks contends that where the scope of a third-party complaint goes beyond the framework of the original complaint, it becomes more than a claim for indemnity and contribution and thus violates the restrictions of section 2 — 406(b). (Bio-Scientific Clinical Laboratory, Inc. v. Todd (1986), 149 Ill. App. 3d 845, 848, 501 N.E.2d 192; Filipponio v. Bailitz (1979), 73 Ill. App. 3d 389, 393, 392 N.E.2d 23; Scott & Fetzer Co. v. Montgomery Ward & Co. (1984), 129 Ill. App. 3d 1011, 1021, 473 N.E.2d 421; Ketcham v. Consolidated Rail Corp. (1986), 146 Ill. App. 3d 196, 202, 496 N.E.2d 1104.) Here Continental’s recovery for 10 years of broad-ranging transactions was in no way dependent on the outcome of Import’s narrow claim against Continental.

Import’s claim against Continental and Treesdale concerns the alleged contract for a $240,000 purchase of ball bearings and the alleged breach of that contract by Continental and Treesdale. Therefore, within the parameters of the controversy as framed by the complaint, new parties who may be liable to Continental for all or part of the $240,000 claim may only be brought into the litigation by third-party complaint under sections 2 — 405(a) and 2 — 406(b). The counterclaim filed by Continental may only be directed against Import or Continental’s codefendant Treesdale, and may include “any and all cross claims whatever” under sections 2 — 608(a) and 2 — 614(a). The counterclaim is unlimited as to the claims appropriately brought against Import. However, as to the newly added parties, the allegation that Hicks breached a fiduciary duty owed to Continental and that Hicks and Glass colluded to defraud Continental, all as the alter egos of Import, could have been raised as a third-party complaint only in the limited context of the $240,000 contract and only if the defendant had grounds to seek indemnification or contribution from them should Import be successful on a trial of its underlying complaint.

Clearly the pleading characterized as an amended counterclaim and third-party complaint here fails the test. The allegations in this pleading are far reaching and greatly expanded from the single contract which plaintiff has delineated to be “the controversy” and under the Illinois Code of Civil Procedure may not be brought against new parties by a third-party complaint. An analysis of the precedential authority leads us to the inescapable conclusion that the section 2 — 615 motions to dismiss based on failure to meet the requirements of section 2 — 406(b) filed by Glass and Hicks were properly granted by the trial court. We will not reverse the dismissal of the third-party complaint.

The court in Ketcham v. Consolidated Rail Corp. (1986), 146 Ill. App. 3d 196, 496 N.E.2d 1104, considered a third-party complaint filed by Conrail against Republic Steel in a personal injury suit filed against Conrail in which defendant sought indemnification and contribution for any damages it was required to pay to plaintiff, and additionally sought recovery for damages to defendant’s property as a result of the derailment and damages by way of indemnification for its payment to Chandonia in settlement of an unrelated and separate FELA action. The motion to dismiss filed by Republic was granted as to the property damages claim and as to the indemnity claim for settlement of the unrelated FELA action.

The Ketcham court held that the third-party requirements of section 2 — 406(b) are not expanded by section 2 — 614 to permit a third-party plaintiff to join independent claims against a third-party defendant. (Ketcham, 146 Ill. App. 3d at 201.) Section 2 — 406(b) limits the third-party complaint to only those claims for which a newly joined party is or may be liable to the original defendant for all or part of original plaintiff’s claim against him.

Third-party practice cannot be used to maintain an entirely separate claim, other than the original plaintiff’s claim against the original defendant, even if it arises out of the same general set of facts as the main claim. (Filipponio v. Bailitz (1978), 73 Ill. App. 3d 389, 392, 392 N.E.2d 23; Scott & Fetzer Co. v. Montgomery Ward & Co. (1984), 129 Ill. App. 3d 1011, 1021, 473 N.E.2d 421, aff’d (1986), 112 Ill. 2d 378, 493 N.E.2d 1022.) A third-party complaint must state a cause of action and disclose some relationship upon which a duty to indemnify may be predicated. Muhlbauer v. Kruzel (1968), 39 Ill. 2d 226, 231-32, 234 N.E.2d 790; Templeton v. Blaw-Knox Co. (1977), 49 Ill. App. 3d 1057, 1059, 365 N.E.2d 235; Vassolo v. Comet Industries, Inc. (1975), 35 Ill. App. 3d 41, 44, 341 N.E.2d 54.

Although counterclaims directed against original parties need not be germane to matters brought in the complaint, where additional parties are brought in, the subject matter of the claim against them must arise out of the same transaction as that pleaded in the complaint. (Bio-Scientific Clinical Laboratory, Inc. v. Todd (1986), 149 Ill. App. 3d 845, 848, 501 N.E.2d 192.) Section 2 — 406(b) precludes the bringing in of new parties, if the third-party complaint is unrelated to the original complaint and if the cause of action against the third-party complaint is not one for indemnity or contribution. (Bio-Scien tific v. Todd, 149 Ill. App. 3d at 848.) Where the scope of the third-party complaint goes beyond the framework of the original complaint, it becomes more than a claim for indemnity or contribution.

Continental asserts the “fact that the scope of the amended third-party complaint is broader than the scope of Import’s complaint does not make it improper.” Continental argues that Glass and Hicks are alter egos of Import and, by filing the Import complaint, they therefore are original parties to the suit and under section 2 — 614(a) Continental can assert any and all claims against them by way of counterclaim regardless of their relation to the claim asserted by the plaintiff. Continental contends that therefore they need not be brought into the suit individually by third-party complaint nor is Continental’s claim against them limited to the original controversy as defined by Import’s complaint. Continental states that its labelling of the pleading as an amended counterclaim and third-party complaint was the result of “an abundance of caution” but that this designation does not affect its sufficiency as a counterclaim. For all of the reasons discussed, we do not agree that Continental’s claim against Glass and Hicks is a counterclaim.

We are concerned here only with the propriety of the trial court’s April 18, 1989, ruling under section 2 — 406(b) which dismissed Continental’s amended third-party complaint against Hicks and Glass with prejudice. The court’s dismissal of the amended counterclaim under section 2 — 615 was not a final order inasmuch as defendant was given leave to amend, and subsequent to filing this appeal, defendant did amend. Therefore we will not consider it in this appeal.

We next consider Continental’s assertion that the trial court erred in entering the order of dismissal of the third-party complaint “with prejudice” and that the dismissal order should not operate as an adjudication on the merits so as to bar a separate action against Hicks or Glass.

Initially we note that the underlying complaint by Import against Continental was based upon a $240,000 contract action. The third-party complaint brought by Continental against Hicks and Glass sought recovery for both the $240,000 contract dispute and for allegedly wrongful actions by Hicks and Glass over a 10-year period. Although the third-party complaint did not specifically refer to indemnity or contribution, the only way in which Continental could bring Hicks and Glass into the litigation as third-party defendants was by claiming that it was entitled to indemnity or contribution from them as to the original Import claim. Ill. Rev. Stat. 1987, ch. 110, par. 2— 406(b).

The trial court’s dismissal of the third-party complaint was entered pursuant to section 2 — 406(b). Thus, the trial court concluded that Continental had failed to adequately state a claim for contribution or indemnity against Hicks and Glass and dismissed the complaint under section 2 — 615.

Illinois Supreme Court Rule 273 provides as follows:

“Unless the order of dismissal or a statute of this State otherwise specifies, an involuntary dismissal of an action other than a dismissal for lack of jurisdiction, for improper venue, or for failure to join an indispensable party, operates as an adjudication upon the merits.” 134 Ill. 2d R. 273.

A dismissal with prejudice is an adjudication on the merits and a final disposition, barring the right to bring or maintain an action on the same claim or cause. It is res judicata as to every matter litigated. Black’s Law Dictionary at 421 (5th ed. 1979).

Continental has alleged that Hicks and Glass are the alter egos of Import and that Import, Hicks and Glass, as one entity, are jointly liable to Continental in fraud. Yet, a third-party complaint is properly brought only where a defendant raises a claim for contribution or indemnity from one jointly liable with the defendant for the injury or loss asserted by the plaintiff in the original complaint. (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 406(b).) In this case, Hicks and Glass are alleged to have acted in concert with Import, the plaintiff, and not with Continental, the defendant. Therefore, Hicks and Glass could not under any allegations of fact be liable to Continental under a contribution or indemnity theory.

Because Continental could never bring a claim for contribution or indemnity against Hicks and Glass, the trial court’s involuntary dismissal of those counts with prejudice was proper and was an adjudication on the merits under Supreme Court Rule 273 (134 Ill. 2d R. 273). We find, however, that the dismissal was a final adjudication only as to Continental’s attempt to bring a third-party complaint against Hicks and Glass which was not limited to the underlying cause of action and based upon joint liability for the plaintiff’s loss.

Since the dismissal of the third-party complaint operates as a bar and is res judicata only as to Continental’s attempt to bring a third-party complaint against Hicks and Glass, which it could not do, the dismissal order would not preclude Continental from bringing a separate action against Hicks and Glass which is premised upon a different theory. See Fender v. St. Louis Southwestern Ry. Co. (1979), 73 Ill. App. 3d 522, 526, 392 N.E.2d 82, 85; Schlossberg v. E.L. Trendel & Associates (1978), 63 Ill. App. 3d 939, 942, 380 N.E.2d 950, 954. For all of the foregoing reasons, we reverse the trial court order of dismissal with prejudice and remand the cause for the entry of an order of dismissal without prejudice.

Reversed and remanded with instructions.

RAKOWSKI, P.J., and EGAN, J., concur.