author: JUSTICE HOFFMAN

text:
    ILLINOIS FOUNDERS INSURANCE COMPANY, Plaintiff-Appellee, v. JAMES GUIDISH et al., Defendants (Robert Luksik, Defendant-Appellant).- ILLINOIS FOUNDERS INSURANCE COMPANY, Plaintiff-Appellee, v. JAMES GUIDISH et al., Defendants-Appellants (Michael’s Magic Touch, Ltd., et al., Defendants).
    First District (4th Division)
    Nos. 1 — 92—0176, 1—92—0254 cons.
    Opinion filed June 3, 1993.

      Robert Schey & Associates, of Chicago (Mark L. Karno, of counsel), for appellant Robert Luksik.
    Robert L. Caplan, of Clarendon Hills, and Sheldon S. Gomberg, of Chicago, for appellants James Guidish and Joseph Guidish, Jr.
    Bresnahan & Garvey, of Chicago (Kenneth T. Garvey and Robert O’Connor, of counsel), for appellee.
   JUSTICE HOFFMAN

delivered the opinion of the court:

These appeals arise from the entry of summary judgment in favor of plaintiff, Illinois Founders Insurance Company (Illinois Founders), on its declaratory judgment action against defendants, James Guidish, Joseph Guidish, Jr., Michael’s Magic Touch, Ltd. (Magic Touch), Robert Luksik, August Russo; and Timothy R. Pope. The trial court determined that: (1) Illinois Founders did not owe a duty to defend or indemnify its insured, Magic Touch, or Magic Touch’s employees, Luksik, Russo, and Pope, in a personal injury action filed against them by James and Joseph Guidish; and (2) the liability policy issued to Magic Touch did not cover the occurrence alleged in the Guidishes’ complaint. The Guidishes and Luksik filed separate appeals which were consolidated in this court. We consider: (1) whether the declaration that the policy did not cover counts I and II of the Guidishes’ personal injury complaint was premature because their appeal from the dismissal of those counts was pending; and (2) whether the policy required Illinois Founders to prosecute Luksik’s appeal from the personal injury action. For the following reasons, we affirm in part, reverse in part, and remand with directions.

Proper analysis of the issues raised on appeal requires discussion of the Guidishes’ tort action and the procedural posture of the parties at the time the trial court in the declaratory judgment action entered summary judgment.

In their fourth-amended complaint for personal injury, the Guidishes alleged that they were injured in a fight that occurred in the parking lot of a lounge that Magic Touch operated in Lyons, Illinois. James Guidish was injured when Luksik, an employee of Magic Touch, struck him in the face with a baseball bat. Joseph Guidish was injured when Russo, also an employee of Magic Touch, hit him in the head with a gun. The Guidishes’ complaint sought recovery for their injuries in five counts. Only counts I, II, and III are relevant to this appeal.

Count I, brought on behalf of James Guidish, and count II, brought on behalf of Joseph Guidish, sought recovery against Magic Touch for the alleged negligence of its parking lot attendant, Pope. Specifically, those counts alleged that Pope had improperly initiated a fight with a third party in the parking lot which caused several other fights. The Guidishes were injured in one of the subsequent battles. In count III, James Guidish alleged that Luksik, acting within the scope of his employment for Magic Touch, willfully and wantonly struck him in the face with a baseball bat. The count further alleged that malice was the gist of the action against both Luksik and Magic Touch.

On the date the Guidishes were allegedly injured, Magic Touch was insured under a policy issued by Illinois Founders which covered bodily injury arising out of the operation of the lounge. The policy required Illinois Founders to defend any damage suit brought against Magic Touch as a result of bodily injury. However, Illinois Founders’ duty to defend under the policy did not extend to “bodily injury suffered by or alleged to have been suffered by any person or persons arising out of assault or battery perpetrated by the named insured or by any person employed by or acting on behalf of the named insured.” As a result, Illinois Founders, acting under a reservation of rights, paid for Luksik’s representation in the trial court by counsel of his own choosing.

After the Guidishes filed their personal injury complaint, Illinois Founders filed the present declaratory judgment action against defendants requesting the trial court to find that: (1) it was not obligated to defend Magic Touch or its employees, Luksik, Russo, and Pope, in the Guidishes’ tort action; and (2) the liability policy issued to Magic Touch did not cover the occurrence alleged in the Guidishes’ complaint.

While the declaratory action was pending, the trial court in the tort action dismissed counts I and II of the Guidishes’ complaint for failure to state a cause of action for negligence. The Guidishes appealed that ruling on October 25, 1991. Count III was tried before a jury, which found in favor of James Guidish and against Magic Touch and Luksik. In response to special interrogatories, the jury found that when Luksik struck James Guidish he acted intentionally, he was not acting in self-defense, and he acted in the course and scope of his employment for Magic Touch. The trial court entered judgment and ruled on post-trial motions. On October 31, 1991, Luksik appealed the judgment entered against him on count III.

On October 25, 1991, the trial court entered summary judgment in the declaratory judgment action in favor of Illinois Founders, finding that it did not owe a duty under the policy to indemnify Magic Touch or Luksik for the judgments against them in the tort action and, further, that it did not have a duty to defend or prosecute any appeals from those judgments. After denying motions to reconsider, the court modified its order to further provide that the policy did not cover the allegations of the Guidishes’ complaint in the tort action.

The Guidishes and Luksik now appeal from the order granting Illinois Founders summary judgment.

Opinion

The issues in the instant appeal are narrow in scope. The Guidishes seek only a reversal of the trial court’s declaration that Illinois Founders’ policy did not cover counts I and II of their complaint in the underlying tort action. Luksik seeks a reversal of the court’s declaration that Illinois Founders did not have a duty to prosecute an appeal from the judgment entered against him in the tort action. Both arguments will be addressed in turn.

The Guidishes contend that the trial court’s declaration that there was no insurance coverage for counts I and II of their complaint was premature because their appeal from the dismissal of those counts was pending.

The declaratory judgment statute provides that a court “may, in cases of actual controversy, make binding declarations of rights, having the force of final judgments.” (Emphasis added.) (Ill. Rev. Stat. 1991, ch. 110, par. 2 — 701(a).) By its very terms, the statute allows the trial court discretion in deciding whether to grant declaratory relief. This rule applies to declaratory actions where an insurer seeks a determination of insurance coverage rights. (See Maryland Casualty Co. v. Peppers (1976), 64 Ill. 2d 187, 355 N.E.2d 24.) In Maryland Casualty, our supreme court considered the scope of a trial court’s discretion in such a case. The court found that a trial court abuses its discretion in issuing a declaration where the questions necessary to determine insurance coverage rights also constitute the “ultimate facts upon which recovery is predicated” in an unresolved personal injury action arising from the same occurrence giving rise to the insurance claim. (Maryland Casualty, 64 Ill. 2d at 197, 355 N.E.2d at 30; see also Thornton v. Paul (1978), 74 Ill. 2d 132, 384 N.E.2d 335.) In such circumstances, the actions of the trial court are premature because a declaration could, under the doctrine of collateral estoppel, foreclose a plaintiffs recovery on one of his theories of liability in the underlying tort action. Maryland Casualty, 64 Ill. 2d at 197, 355 N.E.2d at 30.

Each of the cases which articulate this proposition has a common factual thread: the declaratory judgment was entered prior to the resolution of the underlying tort action in the trial court. In contrast, the declaration in the instant case was entered after the underlying tort action was resolved at the trial level but before the appeal was resolved.

We note that, contrary to the Guidishes’ assertion, at the time summary judgment was entered in the declaratory judgment action, the order dismissing counts I and II was final. The Guidishes cite Supreme Court Rule 301 (134 Ill. 2d R. 301) to support their proposition that the order dismissing counts I and II was not final because their appeal from that order was pending. This contention is misplaced. Rule 301 speaks to the appealability of final judgments. To be sure, it provides that “[a]n appeal is a continuation of the proceeding” (134 Ill. 2d R. 301), but nowhere does it provide that the prosecution of an appeal renders a final judgment nonfinal pending the disposition of the appeal. The pendency of an appeal has no effect on the finality of the order appealed from. Under certain circumstances, the pendency of an appeal can affect the enforceability of a judgment (see 134 Ill. 2d R. 305), but not its finality. More to the point, a final judgment can serve as the basis to apply the doctrines of res judicata and collateral estoppel even though the judgment is being appealed. Wiseman v. Law Research, Inc. (1971), 133 Ill. App. 2d 790, 270 N.E.2d 77.

On the specific issue before us, we find that the trial court acted prematurely when it declared that the policy did not cover counts I and II of the Guidishes’ personal injury complaint. There is no question that Illinois Founders’ policy covers Magic Touch for bodily injury caused by its employees’ negligence. There is also no question that counts I and II sought recovery from Magic Touch on a negligence theory. The only basis for the trial court’s entry of summary judgment in the declaratory judgment action as it related to counts I and II in the underlying tort action was the effect of the dismissal of those counts. If the dismissal of one or both of the negligence counts in the underlying tort action was reversed on appeal and remanded for trial, the declaration of Illinois Founders’ rights in the declaratory action would still stand as res judicata on the issue of coverage under the policy. As was noted in State Life Insurance Co. v. Board of Education (1948), 401 Ill. 252, 257, 81 N.E.2d 877, 880:

“The rule has been settled that where a judgment in one case has successfully been made the basis for the judgment in a second case, the second judgment will stand as res judicata, although the first judgment be subsequently reversed.”

We agree with the Wiseman court’s conclusion that the only means of avoiding such conflicting judgments is to delay a decision in the second suit pending a decision on the appeal of the first. (Wiseman, 133 Ill. App. 2d at 793, 270 N.E.2d at 80.) In the instant case, a sound exercise of judicial discretion would mandate that any decision on the declaratory judgment action as to insurance coverage for counts I and II in the underlying tort action be delayed until the appeal from the dismissal" of those counts is resolved.

Next, we address Luksik’s contention that Illinois Founders was obligated to prosecute an appeal on his behalf from judgment entered against him on count III of the Guidishes’ complaint. In support of this argument, Luksik urges this court to adopt the holding in Palmer v. Pacific Indemnity Co. (1977), 74 Mich. App. 259, 254 N.W.2d 52. There, the court held that, upon the insured’s request, an insurer which has written a policy with a broad duty to defend clause has an absolute duty to prosecute an appeal from any judgment adverse to the interests of the insured.

In response to Luksik’s argument, Illinois Founders contends that a duty to defend clause does not necessarily oblige the insurer to prosecute an appeal. Rather, the question of whether an insurer has a duty to prosecute an appeal must be determined in the context of its obligations of good faith and fair dealing in performing the terms of its insurance policy. Illinois Founders claims that when, as in this case, the insurer has discharged any potential obligation to defend a claim at the trial level and the disposition of the matter at trial includes a factual determination negating coverage under the policy, the insurer is under no duty to prosecute an appeal. Illinois Founders relies on Lincoln Park Arms Building Corp. v. United States Fidelity & Guaranty Co. (1936), 287 Ill. App. 520, 5 N.E.2d 773, General Casualty Co. v. Whipple (7th Cir. 1964), 328 F.2d 353, and Denham v. La Salle-Madison Hotel Co. (7th Cir. 1948), 168 F.2d 576.

We reject Luksik’s invitation to adopt an absolute rule that an insurer is always obligated to prosecute an appeal. When taken to the extreme, such a rule could place an insurer in the untenable position of being obligated to pursue a totally groundless appeal simply to avoid a charge that it breached its duty to defend. At the very least, as invariably occurs when reviewing courts weave the words “always” or “never” into a rule of law, adopting an absolute rule would condemn future generations to engaging in strained logic in an effort to craft exceptions.

The parties acknowledge a third line of authority which obligates an insurer to prosecute an appeal on behalf of an insured if reasonable grounds for such an appeal exist. (See, e.g., Reichert v. Continental Insurance Co. (La. Ct. App. 1974), 290 So. 2d 730.) In our view, the obligation of good faith and fair dealing requires the insurer to prosecute an appeal in circumstances where reasonable grounds are present. We therefore conclude that, when an insurance contract provides a general duty to defend, the question of whether the insurer is obligated to prosecute an appeal from a judgment adverse to an insured must be resolved in the context of the duty of good faith and fair dealing owed by the insurer to its insured. Lincoln Park Arms, 287 Ill. App. at 536-37, 5 N.E.2d at 780.

We need not reach the issue of whether such circumstances were present in this case. If Illinois Founders owed no duty to defend Luksik in the first instance, it clearly had no duty to appeal a judgment against him. Count III of the Guidishes’ personal injury complaint in the tort action requested relief against Luksik for battery alleging that Luksik willfully and wantonly struck James Guidish with a bat. It further alleged that malice was the gist of the action. The Illinois Founders’ policy in issue specifically excluded from coverage bodily injury suffered or alleged to have been suffered arising out of a battery. Because the sole claim against Luksik was battery, Illinois Founders had no obligation to defend Luksik in the first instance. Therefore, it had no duty to prosecute an appeal on his behalf. See Maryland Casualty, 64 Ill. 2d 187, 355 N.E.2d 24; Aetna Casualty & Surety Co. v. Freyer (1980), 89 Ill. App. 3d 617, 411 N.E.2d 1157.

In reaching the above conclusion, we are aware of cases that have compelled an insurer to defend its putative insured even though the complaint, standing alone, did not allege an occurrence potentially -within the policy’s coverage. These cases involve circumstances where the insurer had knowledge of true but unpleaded facts which, when taken together with the complaint’s allegations, indicated that the claim was potentially within the policy’s coverage. La Rotunda v. Royal Globe Insurance Co. (1980), 87 Ill. App. 3d 446, 408 N.E.2d 928; Associated Indemnity Co. v. Insurance Co. (1979), 68 Ill. App. 3d 807, 386 N.E.2d 529.

Such is not the circumstance in the case at bar. When the trial court declared that Illinois Founders had no duty to prosecute an appeal, it had before it not only count III of. the Guidishes’ complaint but also Luksik’s conviction for the criminal charge of aggravated battery arising from the occurrence. The conviction was prima facie evidence that Luksik committed battery when he struck James Guidish. (Thornton, 74 Ill. 2d 132, 384 N.E.2d 335.) Once Illinois Founders placed this evidence before the court in support of its motion for summary judgment, the burden shifted to Luksik to come forward with some evidence to rebut the presumption created by his criminal conviction. (Fooden v. Board of Governors (1971), 48 Ill. 2d 580, 272 N.E.2d 497; Kielbasa v. St. Mary of Nazareth Hospital (1991), 209 Ill. App. 3d 401, 568 N.E.2d 208.) Luksik, however, submitted nothing to oppose Illinois Founders’ evidentiary material. As a result, not only is there a total lack of evidence in the record to show that Illinois Founders had knowledge of true facts which might bring Luksik’s actions within the coverage of the policy, the unrebutted evidence established that, to the contrary, his actions were specifically excluded.

By reason of the foregoing, we reverse those portions of the trial court’s orders which declared that there was no insurance coverage for counts I and II of the Guidishes’ fourth-amended complaint and remand the matter to the trial court with directions to stay all proceedings relating to coverage on counts I and II until the Guidishes’ appeal from the dismissal of those counts is resolved. Also, we affirm the trial court’s declaration that Illinois Founders owed no duty to prosecute an appeal from the judgment entered against Luksik in the underlying tort action.

Affirmed in part, reversed in part, and remanded with directions.

JIGANTI, P.J., and CAHILL, J., concur.


source: Caselaw Access Project

author: JUSTICE BOWMAN

license: Public Domain

text:
    PETER J. SIKLAS, Plaintiff-Appellant, v. ECKER CENTER FOR MENTAL HEALTH, INC., Defendant-Appellee (Peter Chase, Defendant).
    Second District
    No. 2 — 92—0504
    Opinion filed July 29, 1993.
    Rehearing denied August 27, 1993.

      David S. Pochis and Alan D. Katz, both of Chicago, for appellant.
    Manuel Barbosa, of Elgin, and Paul G. O’Toole and Robert B. Baal, both of Baal & O’Connor, of Chicago, for appellee.
   JUSTICE BOWMAN

delivered the opinion of the court:

Plaintiff, Peter Siklas, appeals from an order granting summary judgment to defendant, Ecker Center for Mental Health, Inc. (Ecker), in this negligence action. Plaintiff contends the trial court applied incorrect law and erred in finding for the defendant on the issue of duty.

The facts, as gleaned from the pleadings, admissions, depositions, exhibits, and affidavits, are as follows. Ecker was a not-for-profit corporation which offered a variety of services for the mentally ill. Plaintiff, who had a history of mental illness, indicated that he had been diagnosed as a paranoid schizophrenic. Upon release from his most recent hospitalization, in October 1987, plaintiff lived at home with his parents and siblings. Ecker first interviewed plaintiff and his parents the following April. According to the report of that interview, plaintiff sought the aid of Ecker because he wanted to get away from home and get an apartment and a job. Although he was currently under the care of a psychiatrist at a different mental health center, he wanted to obtain all his psychiatric services at Ecker. Plaintiff was assigned by Ecker to a psychiatrist, a therapist, and a case manager. He also began attending day-treatment groups.

In mid-May plaintiff was referred to Respite Care Center (Respite Center), an Ecker facility where patients could be admitted on a voluntary basis if they needed to be supervised or monitored around the clock for any reason. Plaintiff was referred to the Respite Center in order to determine if he was a suitable candidate for Ecker Center housing. While plaintiff was still living at the Respite Center, his case manager, Dan Byars, drove him around to look at apartments. Byars also referred him to Chris Elliott, one of the landlords from whom Ecker rented a number of apartments as part of its residential services program. Early in June plaintiff moved into one of Elliott’s two-bedroom units. The apartment was already occupied by Peter Chase, another client of Ecker. As best Byars could recall at his deposition, in looking for suitable housing for plaintiff, he made a determination that plaintiff would be compatible with Chase. The agreement whereby Ecker provided residential services specifically provided that case managers would attempt to place a client with the most compatible roommate. It was standard procedure for a case manager of one client to coordinate with the case manager of another client prior to making arrangements for the two clients to share housing. Under that procedure, Byars would have conferred with Chase’s case manager, Lisa Gray, and the two of them would have determined that plaintiff and Chase could live together satisfactorily. '

Plaintiff moved in with Chase some time early in June 1988. The record indicates that Ecker caseworkers regularly visited the apartments of patients who were in the Ecker residential services program. They not only inspected for cleanliness and the safety of the living quarters, but also checked the clients’ mental status and determined whether they were taking their medications. Also, as part of the housing arrangement, each client agreed to participate in all phases of the individual treatment plan worked out for him or her by Ecker.

In addition to helping him locate housing, Byars assisted plaintiff with matters involving money management and public aid and social security entitlements. Specifically, in December 1988, upon plaintiff’s request, Byars helped plaintiff fill out the paper work to have the payee on his social security checks changed from his mother. Plaintiff wanted the checks in his own name, but, after some discussion, he and Byars agreed that Ecker Center should be the payee. They also worked out a budget for plaintiff to live on after the change was made. In March 1989, Byars helped plaintiff set up a direct deposit for his social security checks. Plaintiff could then withdraw money, provided an Ecker employee also signed the withdrawal slip.

During the time plaintiff lived in the apartment with Chase, he continued to see Byars as well as his therapist and psychiatrist, either on a regular or as-needed basis. In September 1988, Byars reported that plaintiff appeared to be fairly well adjusted to living in his apartment and with his roommate. According to a December 1988 report there had been some issue concerning a door and window left open in the apartment. Byars talked to plaintiff, Chase, and the landlord about the problem.

Toward the end of 1988 Ecker decided to discontinue its apartment leasing program. According to the deposition of Kay Edlebeck, director of case management services for Ecker, she told Chris Elliott he would need to make arrangements directly with the clients if he chose to lease to them and they chose to stay in their respective apartments. Dan Byars’ monthly summary for January 1989 indicates that he discussed this change with plaintiff and explained to plaintiff how he could make rent payments directly to the landlord in the future.

In the spring of 1989 Ecker became aware that plaintiff’s condition was deteriorating and that he was not getting along with his roommate, Chase. In May Dan Byars reported that he told plaintiff he should go to Respite Center, but plaintiff at first refused. Byars also spoke to plaintiff’s parents, but they were not willing to have plaintiff live with them. Plaintiff finally did go to Respite Center on May 26, but stayed only three or four days.

Chase’s case manager, Lisa Gray, similarly reported that Chase came to her several times during May about problems with plaintiff. As Byars did to plaintiff, Gray suggested, among other options, that Chase go to Respite Center until the problem was resolved, but Chase declined.

Chase had been assigned by Ecker to Dr. Franklin for psychiatric care. In the report of an interview on May 16, 1989, Dr. Franklin stated that Chase was under great stress from his roommate, who was not taking his medication, was keeping Chase up at night, and, in Dr. Franklin’s words, was apparently operating in a psychotic manner. Dr. Franklin added: “The patient is barely able to handle his anger at his apartment-mate, and he also fears that in retaliation he may be physically hurt.” The doctor also told Chase he could ask plaintiff to move and assume the full responsibility for the apartment. On June 6, 1989, Dr. Franklin reported that Chase had lost his job because of being upset and explained: “He is enraged with his roommate and hit him once. He came in requesting sleep medication because his roommate is up all night shuffling around and talking in a loud voice. *** He also has feelings about leaving any conflict and stated that his mode is to fight rather than engage in flight.” At his deposition Dr. Franklin indicated that, after the May 16 interview, he became worried about plaintiff and Chase being a “bad mix,” and he did not think they should remain roommates. He indicated that he relayed these concerns to Ecker personnel “more than once, possibly more than twice, possibly more than three times.”

Early in June, Byars visited plaintiff’s apartment and found him arguing with Chase. Byars again offered plaintiff the opportunity to go to Respite Center, without success. Over the next few days plaintiff and Byars began actively searching for a new apartment for plaintiff. As of June 15 they agreed that by the end of the month plaintiff would move, either into a new apartment or to Respite Center. During the same early June time period, Chase again expressed concern about plaintiff to Lisa Gray and again refused Respite Center. Gray made home visits to the apartment shared by plaintiff and Chase on June 5, 8, and 22. Later on the same day as the last of these visits, June 22, 1989, an altercation took place between Chase and plaintiff. During the fracas Chase grabbed a knife and plaintiff was seriously injured.

At his deposition plaintiff claimed that Chase had attacked and cut one of his friends with a knife in April 1989. He also asserted that, towards the end of May, Chase physically attacked him and pulled his phone out of the wall. Dan Byars had a recollection of an incident involving Chase and a third party at the apartment but did not remember anyone being cut or injured. Byars did not recall any other incidents of physical confrontation between Chase and plaintiff. When Chase was questioned about the confrontation with plaintiff’s friend, he said he felt threatened by the friend and used a pocket knife to persuade him to leave the apartment. He denied cutting the friend. Chase also denied any arguments or quarrels involving physical encounters with plaintiff prior to the June 22, 1989, incident when plaintiff was injured.

Plaintiff filed a complaint against Ecker for damages, alleging essentially that Ecker undertook generally to supervise, counsel, and control plaintiff and Chase with regard to certain life activities and further undertook specifically to arrange for roommates for each of them and to monitor the activities of the roommates. The complaint asserted that Ecker negligently or willfully and wantonly (1) failed to warn plaintiff of Chase’s violent propensities, (2) failed to protect plaintiff from injury by removing either him or Chase from the apartment, and (3) failed to prevent Chase from using the knife to injure plaintiff. Ecker subsequently filed a motion for summary judgment asserting that it had no duty to protect the plaintiff from the criminal acts of a third party. Following a hearing on the motion, the trial court found that there remained no genuine issues of material fact and that, as a matter of law, Ecker had no duty to remove plaintiff or Chase from the apartment or to otherwise interfere with plaintiff’s or Chase’s housing decisions. The court granted Ecker’s motion for summary judgment, and plaintiff timely filed this appeal.

A motion for summary judgment should be granted when the pleadings, depositions, admissions, and affidavits reveal that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law. (Ill. Rev. Stat. 1989, ch. 110, par. 2 — 1005(c); Wojdyla v. City of Park Ridge (1992), 148 Ill. 2d 417, 420-21; Lang v. Consumers Insurance Service, Inc. (1991), 222 Ill. App. 3d 226, 239.) Summary judgment, however, is a drastic remedy, and it should be granted only when the right of the moving party is clear and free from doubt. (Logan v. Old Enterprise Farms, Ltd. (1990), 139 Ill. 2d 229, 233; Purtill v. Hess (1986), 111 Ill. 2d 229, 240.) The evidence must be strictly construed against the party seeking summary judgment and liberally in favor of the opponent. (Logan, 139 Ill. 2d at 234; Lang, 222 Ill. App. 3d at 239.) We examine the facts of this case in light of these fundamental principles.

Plaintiffs complaint sounds in negligence. In an action for negligence the plaintiff must set out sufficient facts establishing the existence of a duty owed by the defendant to the plaintiff, a breach of that duty, and an injury proximately resulting from the breach. (Wojdyla, 148 Ill. 2d at 421; Vesey v. Chicago Housing Authority (1991), 145 Ill. 2d 404, 411.) With regard to the element of duty, the plaintiff must show that the defendant was under an obligation to conform to a certain standard of conduct for plaintiff’s protection. (Puttman v. May Excavating Co. (1987), 118 Ill. 2d 107, 116; Collins v. Mid-America Bag Co. (1989), 179 Ill. App. 3d 792, 794.) Whether under the facts of a case there is a relationship between the parties requiring that a legal obligation be imposed upon one for the benefit of the other is a question of law to be determined by the court. (Vesey, 145 Ill. 2d at 411; Rowe v. State Bank (1988), 125 Ill. 2d 203, 215.) Whether a duty has been breached, however, is a question of fact best left to the determination of the trier of fact. Curtis v. County of Cook (1983), 98 Ill. 2d 158, 163; Coronel v. Chicago White Sox, Ltd. (1992), 230 Ill. App. 3d 734, 736.

We will first dispose of plaintiff’s secondary arguments since those are the only arguments to which defendant has directly responded. Ecker asserts it was not in a landlord-tenant relationship with plaintiff and therefore had no control over either plaintiff or Chase, in the sense that it could not evict or otherwise remove either one of them from the apartment. Absent control, according to defendant, it had no duty to remove Chase or plaintiff from the apartment or to otherwise restrict their activities. Defendant relies on the principle that a defendant does not owe a duty to a plaintiff if the defendant did not control or intend to control the property where the injury occurred. (See Simpson v. Byron Dragway, Inc. (1991), 210 Ill. App. 3d 639, 645 (racing association, which sanctioned event but did not own or control site of racetrack, owed no duty to race car driver killed in collision with stray deer on racetrack); Collins v. Mid-America Bag Co. (1989), 179 Ill. App. 3d 792, 794 (defendant, a licensee whose only interest in the land was permission to use it, owed no duty to softball player injured due to holes in playing field in a park, even though defendant organized ball game).) However, as can be seen in both Simpson and Collins this rule is generally invoked where the case involves an unsafe condition of the land itself, rather than injury to plaintiff from a third party which happens to occur on the defendant’s land. Nevertheless, assuming for the moment the rule is applicable here, plaintiff contends that there remained factual questions concerning Ecker’s control over the apartment and that summary judgment was thereby precluded. The record, however, belies plaintiff’s position. The depositions and various attachments leave no doubt that Ecker itself stopped renting the apartment well before the June incident between Chase and plaintiff. Accordingly, we agree with defendant that it is not liable on the basis that it controlled the apartment where plaintiff was injured.

Ecker also asserts that no special relationship existed between itself and plaintiff whereby it was under a duty to protect plaintiff from injury at the hands of Chase. This contention reflects established principles of Illinois law. Generally, one does not owe a duty to protect another from criminal acts of third parties unless the plaintiff and defendant are in one of a very limited number of special relationships, set forth in section 314A of the Restatement (Restatement (Second) of Torts §314A (1965)) as follows: common carrier-passenger, innkeeper-guest, possessor of land-invitee, and custodian-person in lawful custody. (Rowe v. State Bank (1988), 125 Ill. 2d 203, 215-16; Fancil v. Q.S.E. Foods, Inc. (1975), 60 Ill. 2d 552, 559-60; B.C. v. J.C. Penney Co. (1990), 205 Ill. App. 3d 5, 9.) We find that none of these special relationships existed between plaintiff and Ecker, and plaintiff does not claim otherwise. Plaintiff does, however, urge that there was a special relationship between plaintiff and Ecker, sufficiently similar to those set forth in the Restatement to support the conclusion that Ecker had a duty to protect plaintiff from the injury he received. However, plaintiff does not offer any cogent reasons or convincing rationale for expanding the scope of the narrow Restatement exceptions, and we decline to do so. In sum, plaintiff’s responses to the two arguments just discussed are not persuasive that summary judgment in favor of Ecker was inappropriate. We reach a different conclusion, however, upon examination of plaintiff’s primary argument.

Plaintiff contends that Ecker voluntarily undertook the duty to provide him with a compatible roommate and to monitor the living arrangements, mental status, and compatibility of both himself and Peter Chase. Having undertaken these tasks, according to plaintiff, Ecker had a duty to perform each and every one of them in a reasonable manner for his benefit. We agree and conclude that Ecker’s motion for summary judgment should not have been granted.

One who voluntarily undertakes to render services to another is liable for bodily harm caused by his failure to perform such services with due care or with such competence and skill as he possesses. (Vesey v. Chicago Housing Authority (1991), 145 Ill. 2d 404, 415; Cross v. Wells Fargo Alarm Services (1980), 82 Ill. 2d 313, 317; Nelson v. Union Wire Rope Corp. (1964), 31 Ill. 2d 69, 85-86.) Section 323 of the Restatement (Second) of Torts (1965) formulates this principle as follows:

“One who undertakes, gratuitously or for consideration, to render services to another which he should recognize as necessary for the protection of the other’s person or things, is subject to liability to the other for physical harm resulting from his failure to exercise reasonable care to perform his undertaking, if
(a) his failure to exercise such care increases the risk of such harm, or
(b) the harm is suffered because of the other’s reliance upon the undertaking.” (Restatement (Second) of Torts §323 (1965).)

The scope of an assumed duty is limited by the extent of the undertaking. (Rowe v. State Bank (1988), 125 Ill. 2d 203, 218-19; Pippin v. Chicago Housing Authority (1979), 78 Ill. 2d 204, 209-10; B.C. v. J.C. Penney Co. (1990), 205 Ill. App. 3d 5, 13; Poelker v. Macon Community Unit School District No. 5 (1990), 212 Ill. App. 3d 312, 315.) Although it is not clear exactly how plaintiff became connected with Ecker, the pleadings and the documentation offered relative to the motion for summary judgment reflect that defendant did indeed undertake to provide services to plaintiff.

Plaintiff had a history of mental illness, and Ecker provided services to the mentally ill. Plaintiff told Ecker his first concern was to find housing away from his family. Ecker initially placed plaintiff in its Respite Care Center and assigned him to a psychiatrist, a social worker, and a case manager. After making a determination that plaintiff and Chase would be compatible roommates, Ecker offered plaintiff housing in one of its leased apartments, where it had previously placed Chase.

After plaintiff moved into the apartment, Ecker employees made regular visits to check on the cleanliness and safety of his living quarters. They also checked on whether plaintiff was taking his medication, monitored his general mental status, and encouraged him to keep appointments with his psychiatrist and therapist and to go to day treatment at the Ecker Center facility. Dan Byars assisted plaintiff with the management of his money as well as numerous other tasks of daily living. Home checks and the other services continued without change even after Ecker itself stopped leasing the apartments and the clients began paying rent directly to the landlord. Collectively, the evidence demonstrates that Ecker undertook to help plaintiff find and maintain suitable housing and a compatible roommate, to monitor and assist plaintiff with various aspects of his illness and treatment, and to assist plaintiff with basic life skills.

Implicit in Ecker’s undertakings was the obligation to determine, insofar as possible, that plaintiff remained safe in his housing, despite his illness. Ecker monitored both plaintiff’s and Chase’s mental conditions. With its knowledge and expertise in the area of mental illness, Ecker could be expected to recognize changes in plaintiff’s or Chase’s mental health, or in the relationship between the two of them, which might arouse concern for plaintiff’s safety. In our view, the services which Ecker undertook to provide to plaintiff were the kind of services which it should have recognized as necessary for the protection of plaintiff’s person. Too, any failure on Ecker’s part to exercise reasonable care increased the risk of harm to plaintiff, at least to the extent that Ecker had the ability to diffuse the growing tension and hostility between plaintiff and Chase. It is evident also that, due to his illness, plaintiff relied on Ecker’s assistance and, ultimately, was injured in a situation substantially created and maintained by Ecker as part of its services. Consequently, under the rules regarding voluntary undertakings, Ecker had a duty to exercise reasonable care in performing those services which made up its undertaking on behalf of plaintiff.

Whether Ecker breached its duty must be determined by the trier of fact upon remand. (See Curtis, 98 Ill. 2d at 163.) Plaintiff asserted in his complaint that Ecker was negligent in that it failed to warn him about Chase’s propensity for violence, failed to remove him or Chase from the apartment, and failed to prevent Chase from injuring him with a knife. It is our observation after reviewing the record that many of the facts underlying these allegations are themselves the subject of conflicting evidence. Assuming, however, that plaintiff can adequately prove the relevant facts, it will be for the fact finder to decide whether, under the unique circumstances of this case, Ecker acted with reasonable care in performing the services it undertook to provide to plaintiff.

Finally, we deem it appropriate to comment on the trial court’s finding that the principles of Estate of Johnson v. Condell Memorial Hospital (1988), 119 Ill. 2d 496, apply to this case. The Johnson court held essentially that a mental health facility has no duty to control a known dangerous person in order to prevent harm to others, unless the dangerous person is legally in the custody, and thus in the actual control, of the facility. The complaint in Johnson did not allege that the patient had been either voluntarily or involuntarily admitted to a mental health facility pursuant to the Mental Health and Developmental Disabilities Code (Code) (Ill. Rev. Stat. 1983, ch. 91½, par. 1 — 100 et seq.), or that an emergency petition for immediate hospitalization had been filed under the Code. Consequently, the complaint failed to allege that the dangerous person involved there had been in the custody of the hospital and, therefore, failed to allege a duty.

We fail to see how Johnson applies to this case. As we have discussed, plaintiff basically claims, not that Ecker failed to control Chase for his benefit, but that Ecker undertook to provide services to him and, due to the negligent performance of those services, proximately caused his injuries. Plaintiff has alleged and shown that defendant had a duty corresponding to its voluntary undertaking. Custody, of either plaintiff or Chase, is not an issue. Consequently, Johnson does not control the disposition of this matter.

For the reasons stated, the order of the circuit court of Kane County granting summary judgment in favor of Ecker is reversed, and this matter is remanded for further proceedings.

Reversed and remanded.

INGLIS, P.J., and UNVERZAGT, J., concur.


author: JUSTICE McLAREN

text:
    BERNARD M. POWERS, Plaintiff-Appellant, v. ARACHNID, INC., Defendant-Appellee (Michael Tillery, Defendant).
    Second District
    No. 2 — 92—1043
    Opinion filed July 29, 1993.

      Thomas D. Luchetti, Andrew C. Osen, and Debra A. Delia, all of Thomas D. Luchetti, P.C., of Rockford, for appellant.
    Scott C. Sullivan, of Williams & McCarthy, P.C., of Rockford, and Joel T. Pelz, R. Edward Wilhoite, and Allen C. Schlinsog, all of Jenner & Block, of Chicago, for appellee.
   JUSTICE McLAREN

delivered the opinion of the court:

Plaintiff, Bernard M. Powers, appeals from an order dismissing count I of his cause of action against defendant, Arachnid, Inc., pursuant to section 2 — 619(a)(4) of the Code of Civil Procedure. (735 ILCS 5/2 — 619(a)(4) (West 1992).) For the following reasons, we reverse and remand.

In June 1986, the parties entered into an employment contract whereby plaintiff assumed the duties as director of marketing and sales for defendant corporation at a salary of $90,000 annually. The agreement contained a noncompetition clause where plaintiff agreed not to “directly or indirectly own, operate, manage, control, be employed by, participate in, or be connected in any manner with the ownership, management, operation, or control of any competitive business similar to the type of business conducted by Arachnid.” Plaintiff’s salary was increased to $100,000 annually effective May 1988.

In the fall of 1988 and winter of 1989, two principals in defendant corporation, Paul Beall and Michael Tillery, attempted to negotiate a buyout of their respective interests in Arachnid. Since negotiations failed, Beall and Tillery sought third-party purchasers. Plaintiff became concerned about his future as an Arachnid employee. On February 13, 1989, the parties supplemented plaintiff’s employment contract in the event of plaintiff’s severance. The agreement provided in pertinent portion as follows:

“1. Employee will continue to serve the Employer at the same or at an improved level of service as obtained prior to the exercise of the buy/sell agreement aforesaid, during and following the period of negotiation over such buy/sell agreement.
2. If after, but only after, a significant change in ownership of stock of the Employer *** Employee shall be fired by new management, or Employee shall find conditions of employment intolerable such that Employee terminates employment with Employer, then Employee shall be paid severance pay equal to six (6) months at Employee’s present salary, to be paid on a biweekly basis during the six (6) months following such termination or discharge.
3. This Agreement shall apply only if such termination or discharge occurs within one (1) year after date hereof.”

By letter from Tillery in his capacity as president of Arachnid, plaintiff’s employment with defendant corporation was terminated effective May 2, 1989. The letter stated that plaintiff’s termination was due to a steady decline in his performance level. Defendant agreed to pay plaintiff his regular salary through June 1, 1989.

On June 16, 1989, plaintiff filed a seven-count complaint against defendant. Count I, which sought damages for breach of the severance agreement, was amended on October 16, 1989. Defendant responded by filing a motion to dismiss count I pursuant to section 2— 619(a)(4) of the Code of Civil Procedure. (735 ILCS 5/2 — 619(a)(4) (West 1992).) The motion referred to a decision by the Seventeenth Judicial Circuit confirming a decision by the board of review for the Department of Employment Security (DES) determining that plaintiff was not qualified for unemployment insurance benefits because he was discharged for “misconduct” connected with work as defined in section 602(A) of the Unemployment Insurance Act (the Act) (820 ILCS 405/602(A) (West 1992)). Defendant’s motion asserted that plaintiff’s action for breach of the severance agreement is barred under the doctrine of res judicata by virtue of the ruling by the DES. Defendant’s motion to dismiss count I was granted. Plaintiff’s motion for a Rule 304(a) finding (134 Ill. 2d R. 304(a)) was granted and this appeal followed.

Where the bases of recovery for separate counts are different and the trial court makes the requisite finding that there is no just reason to delay enforcement or appeal (134 Ill. 2d R. 304(a)), the dismissal of a single count is appealable because it disposes of a distinct cause of action. (Viirre v. Zayre Stores, Inc. (1991), 212 Ill. App. 3d 505, 512.) In count I, plaintiff seeks recovery for breach of the severance agreement. This is separate and distinct from the other six counts, which seek recovery for vacation accrual, loss of the option to purchase Arachnid shares, intentional infliction of emotional distress, libel, breach of privacy, and promissory estoppel. Therefore, plaintiff is entitled to appeal the section 2 — 619 dismissal of count I.

A section 2 — 619 motion provides a means of disposing of issues of law or easily proved issues of fact. (Geick v. Kay (1992), 236 Ill. App. 3d 868, 874.) This type of motion admits all well-pleaded facts alleged in the complaint and reasonable inferences drawn from those facts. (Chicago Title & Trust Co. v. Weiss (1992), 238 Ill. App. 3d 921, 924.) A complaint should not be dismissed under section 2— 619 unless it clearly appears that no set of facts can be proved which would entitle the plaintiff to recover. Elliott v. L R S L Enterprises, Inc. (1992), 226 Ill. App. 3d 724, 728.

Defendant’s section 2 — 619 motion asserted that plaintiff’s cause of action for breach of the severance agreement is barred by a judgment of the circuit court which confirmed the decision of the DES board of review determining that plaintiff is not entitled to recover unemployment insurance benefits because he was discharged for misconduct connected with work defined by section 602(A) of the Act. (820 ILCS 405/602 (West 1992).) On appeal, plaintiff contends that his cause of action for breach of the severance agreement is not barred by the doctrine of res judicata.

The doctrine of res judicata precludes relitigation of claims or issues previously decided. It is divided into two branches: estoppel by judgment, sometimes referred to as res judicata, and estoppel by verdict, also known as collateral estoppel. (Osborne v. Kelly (1991), 207 Ill. App. 3d 488, 490.) Estoppel by judgment has a broad preclusive effect. A former adjudication will absolutely bar a subsequent identical cause of action between the same parties or their privies. (Singer v. Brookman (1991), 217 Ill. App. 3d 870, 875.) Issues actually raised in the first proceeding as well as issues that might have been raised may not be relitigated in a subsequent proceeding. (Elliott, 226 Ill. App. 3d at 728.) The narrower branch of res judicata, estoppel by verdict or collateral estoppel, bars a party or a party in privity from relitigating issues essential to and actually decided in a prior proceeding. Ekkert v. City of Lake Forest (1992), 225 Ill. App. 3d 702, 706.

Illinois courts have utilized two tests for determining whether the causes of action are the same for purposes of res judicata. Under the “same evidence test,” res judicata bars a second suit if the evidence needed to sustain the second suit would have sustained the first, or if the same facts were essential to maintain both actions. The “transactional” approach considers whether both suits arise from the same transaction, incident, or factual situation. Under this theory, asserting different types of relief may be considered the same cause of action if a single group of operative facts gives rise to various types of relief. Rodgers v. St. Mary’s Hospital (1992), 149 Ill. 2d 302, 312; Felde v. Chrysler Credit Corp. (1991), 219 Ill. App. 3d 530, 541.

Res judicata and collateral estoppel apply to administrative decisions that are adjudicatory, judicial, or quasi-judicial in nature. (McCulla v. Industrial Comm’n (1992), 232 Ill. App. 3d 517, 520; Osborne, 207 Ill. App. 3d at 491.) After review of an administrative decision, the reviewing court’s judgment is res judicata as to all issues raised before it, and all issues, which could have been raised on the record but were not, are deemed waived. Pedigo v. Johnson (1985), 130 Ill. App. 3d 392, 394.

The proceedings underlying the adjudication of unemployment claims are mandated by the Unemployment Insurance Act. (820 ILCS 405/700 et seq. (West 1992).) The Act provides for administrative (820 ILCS 405/800 through 806 (West 1992)) and judicial review (820 ILCS 405/1100 (West 1992)) of disputed claims where the parties are afforded a reasonable opportunity for a full hearing, on the record, where testimony under oath and other evidence may be presented by the parties. (820 ILCS 405/1000 through 1004 (West 1992).) As such, the DES proceedings are judicial in nature, and such proceedings are subject to the effects of res judicata and collateral estoppel. Osborne, 207 Ill. App. 3d at 491.

The Illinois Appellate Court has barred subsequent causes of action by applying the doctrines of res judicata or collateral estoppel to administrative decisions. In Martinez v. Admiral Maintenance Service (1987), 157 Ill. App. 3d 682, the board of review for the Department of Labor disqualified plaintiff from receiving unemployment benefits based on a finding that she was discharged for continued tardiness. Plaintiff subsequently filed a complaint for retaliatory discharge asserting wrongful discharge for exercising her rights under the Workers’ Compensation Act. (820 ILCS 305/1 et seq. (West 1992).) To prevail on a claim for retaliatory discharge, a plaintiff must prove that she was discharged in violation of a clearly mandated public policy. The appellate court found that the identical issue as to why the plaintiff was fired was presented in both the proceedings for unemployment compensation and on her claim for retaliatory discharge. Since the board of review previously determined that plaintiff was discharged for excessive tardiness, she was precluded from proving that she was discharged in violation of a clearly mandated public policy. The court in Martinez found that res judicata barred the plaintiff’s cause of action for retaliatory discharge and affirmed the dismissal of plaintiff’s complaint on this basis.

Similarly, in Colvett v. L. Karp & Sons, Inc. (1991), 211 Ill. App. 3d 731, the plaintiff filed an unemployment claim with the DES. After a hearing, the board of review reversed the referee’s decision and held that plaintiff’s actions in carrying furniture while allegedly disabled and accepting worker’s compensation benefits was a “willful injury” to the employer which justified termination. Plaintiff subsequently filed a complaint for retaliatory discharge. Applying Martinez, the appellate court held that the doctrine of res judicata barred the plaintiff’s cause of action since “the parties, the subject matter, and the cause of action were the same in the DES proceedings as in the present action” for retaliatory discharge. Colvett, 211 Ill. App. 3d at 733.

When faced with the identical issue in Osborne (207 Ill. App. 3d at 492), the court determined that the doctrine of estoppel by verdict, or collateral estoppel, barred the plaintiff’s claim for retaliatory discharge. Since the DES board of review found that the plaintiff voluntarily left his employment, he was barred from relitigating the issue of whether he was discharged by the employer. The Osborne court declined to address the issue of whether the plaintiff’s claim was barred by the doctrine of res judicata, or estoppel by judgment, and the validity of Martinez. Osborne, 207 Ill. App. 3d at 492.

In this case, plaintiff cites a recent supreme court case in support of his contention that the doctrine of res judicata does not bar his action for breach of the severance agreement. In Mitchell v. Jewel Food Stores (1990), 142 Ill. 2d 152, 172, our supreme court determined that res judicata did not b,ar an employer’s claim for breach of an employment contract based upon the employee’s alleged misconduct in light of an administrative decision awarding unemployment compensation. The court reasoned as follows:

“[T]he circuit court which heard plaintiff’s unemployment compensation appeal ‘was not required to, and did not, address the issue of whether “misconduct” under the [Unemployment Insurance] Act had the same meaning as “misconduct” sufficient to justify termination. *** [W]hether plaintiff committed “misconduct” under the Act is not the same question as plaintiff raised in the instant suit, namely, whether his termination was based on “just cause,” which may include “dishonesty or other misconduct” as set forth in [defendant’s] manual.’ ” Mitchell, 142 Ill. 2d at 172, quoting Mitchell v. Jewel Food Stores (1989), 189 Ill. App. 3d 450, 457.

We believe the rationale in Mitchell seriously undermines the Martinez and Colvett decisions. Plaintiff correctly distinguishes Martinez, Colvett, and Osborne from the present case and correctly cites Mitchell in support of his contention that the DES determination that plaintiff was discharged for misconduct connected with employment within the meaning of the Unemployment Insurance Act is not an essential element of his claim for breach of the severance agreement. Although the parties are the same in plaintiff’s claim for unemployment compensation and for breach of the severance agreement, the causes of action are not identical, as determined by the Mitchell court. The facts necessary to sustain a favorable judgment for breach of the severance agreement would be that the parties agreed to give plaintiff severance pay under certain terms and conditions, that those conditions were met, and that defendant failed to perform under the terms of the agreement. This evidence would not have sustained nor been material to a judgment for unemployment compensation. Although the quasi-judicial determination by the DES that plaintiff was discharged for “injur[ing] employer’s interests by attempting to get two other employees to compete with the employer” constituted misconduct connected with work defined by the Act (820 ILCS 405/ 602(A) (West 1992)), the DES adjudication did not refer to or construe the terms of the severance agreement. The express terms of the severance agreement provide that plaintiff will receive six months severance pay “[i]f after, but only after, a significant change in ownership of stock of the Employer [occurs and] Employee shall be fired by new management, or Employee shall find conditions of employment intolerable such that Employee terminates employment with Employer.” The circuit court’s decision on judicial review did not interpret or apply the terms of the severance agreement. Using either the “same evidence” or the “transactional” approach, the present action for breach of the severance agreement is not barred under the doctrine of res judicata.

Likewise, plaintiff’s cause of action for breach of the severanee agreement is not barred by collateral estoppel. Collateral estoppel precludes relitigation of an issue in a subsequent proceeding where that issue was actually or necessarily decided by a court of competent jurisdiction in an earlier proceeding involving the same parties in a different cause of action. (Frankel v. Otiswear, Inc. (1991), 216 Ill. App. 3d 204, 212.) Collateral estoppel may be invoked only when the issue decided in the prior adjudication is identical in both actions (People v. Scott (1992), 148 Ill. 2d 479, 555), and the party against whom it is asserted had a full and fair opportunity to contest the issue which was determined in the prior proceeding (McCulla, 232 Ill. App. 3d at 520).

In this case, the circuit court on judicial review determined that plaintiff’s employment was terminated because he “met with two coworkers to inquire as to whether they would like to join him in manufacturing a product to compete with the employer’s product.” Although the circuit court on judicial review determined that this meeting constituted “misconduct” within the meaning of the Unemployment Compensation Act (820 ILCS 405/620(A) (West)), it did not address whether plaintiff’s conduct violated the terms of the severance agreement. Since there are facts not covered within the ambit of the administrative judgment denying unemployment compensation that may be proved which would entitle plaintiff to recover, the court erred in dismissing count I of plaintiff’s complaint for breach of the severance agreement. Elliott, 226 Ill. App. 3d at 728.

For the foregoing reasons, we reverse the judgment of the circuit court of Winnebago County and remand this cause to the circuit court for further proceedings in conformance with the opinion of this court.

Reversed and remanded.

INGLIS, P.J., and GEIGER, J., concur.