author: JUSTICE DUNN

text:
    RALPH F. MADONNA et al., Plaintiffs, v. MICHAEL J. GIACOBBE et al., Defendants (Michael J. Giacobbe et al., Third-Party Counterplaintiffs-Appellants; The City of Wood Dale et al., Counterdefendants-Appellees).
    Second District
    No. 2—88—0980
    Opinion filed November 9, 1989.

      John H. Brechin, of Downers Grove, and Kenneth E. Poris, of Poris, Lawrence & Evans, of Lisle, for appellants.
    Gary L. Taylor, of Rathje, Woodward, Dyer & Burt, of Wheaton, Joseph P. Storto, of Joseph P. Storto, P.C., & Associates, of Bensenville, and McDermott, Will & Emery, of Chicago, for appellee James Whalen.
    Kathleen T. Zellner, of Hinshaw, Culbertson, Moelmann, Hoban & Fuller, of Lisle, Karen L. Douglas and Martin A. Kanofsky, both of Pretzel & Stouffer, Chartered, of Chicago, and Erwin W. Jentsch, of Bradtke & Zimmermann, of Mount Prospect, for other appellees.
   JUSTICE DUNN

delivered the opinion of the court:

Counterplaintiffs, Michael Giacobbe and Woodside Builders, Inc., appeal from an order of the circuit court of Du Page County, dismissing their fourth amended counterclaim against counterdefendants, City of Wood Dale, Jerry Greer, the mayor of Wood Dale, and seven members of the Wood Dale city council. On appeal, counterplaintiffs assert that their fourth amended counterclaim stated a cause of action for breach of contract, tortious interference with contract, and tortious interference with a business expectancy. Counterplaintiffs contend in the alternative that if their fourth amended counterclaim was insufficient, they should have been granted leave to amend. We affirm.

This seemingly endless litigation was commenced on October 18, 1976, when plaintiffs, Ralph and Dorothy Madonna, filed a complaint against Giacobbe, Woodside, the City of Wood Dale (the City), and a land trust which held legal title to a subdivision just north of property owned by the Madonnas. The complaint alleged that Giacobbe and Woodside were constructing single-family residences in the subdivision, diverting the natural flow of drainage as a result, and causing surface water from the subdivision to flow onto the Madonnas’ land. The Madonnas sought monetary damages and injunctive relief in their complaint.

On October 27, 1976, the City filed a complaint for indemnity against Giacobbe, Woodside, and the land trust. The City asserted that any active acts of negligence relating to the Madonna complaint were committed by Giacobbe, Woodside, and the land trust, and that any acts of negligence committed by the City were passive acts. In the event of a judgment against the City on the Madonna complaint, the City sought judgment in a like amount against Giacobbe and the other defendants.

Giacobbe and Woodside made the following allegations in the fourth amended counterclaim. Woodside was an Illinois corporation engaged in the business of developing and selling real estate, and Giacobbe was the beneficiary of a land trust which held title to certain real property in Du Page County. On May 6, 1976, Giacobbe, the land trust, and the City entered into a written agreement which provided that the City would annex the subject property. The agreement stated that the City would approve a plat which would subdivide the property into 33 lots for the purpose of allowing Giacobbe to construct a single-family home on each lot.

Paragraph 3D of the agreement stated that Giacobbe would build a water detention basin on lots 6, 7, and 8 of the subdivision. No homes would be constructed on these lots. Subparagraph 2 of paragraph 3D stated as follows:

“It is understood, however, that at such time as the OWNER enters into an agreement with the owner of other property located immediately to the South of and contiguous to the SUBJECT PROPERTY, the CITY will permit storm water detention in the amount required hereinabove to be located upon such other property to the South and contiguous to the SUBJECT PROPERTY, provided the OWNER has obtained prior approval by the County of Du Page and the City Council of the CITY of the Engineering Plans of the aforesaid detention basin and the said detention basin agreement. In the event of such approval by the County and the CITY, the OWNER may submit and apply for building permits for Lots No. 6, 7, and 8 in the manner set forth in the Ordinances of the CITY and this Agreement.”

Paragraph 5 of the agreement prohibited the City from issuing stop orders directing cessation of work on the project without detailing the necessary corrective action and specifying the section of the City code violated by Giacobbe. Paragraph 6 stated that, in order to guaranty his obligation to construct certain public improvements, Giacobbe would be required to post a subdivision bond, provide a straight-line letter of credit or letter of guaranty from a recognized lending institution, or make an interest-bearing cash deposit with the City treasurer.

Paragraph 7 of the agreement provided that the City would issue building permits for the project upon application and submission of plans drawn in accordance with City ordinances. The City was required to issue the permits under such a circumstance even if the public improvements required under the agreement had not yet been constructed by Giacobbe, so long as appropriate provisions had been made to ensure installation of the improvements and final plans for their installation had been approved by the City council.

Count I of the fourth amended complaint alleged that the City breached the annexation agreement. Giacobbe and Woodside alleged in count I that the following actions by the City constituted breaches of the contract: (1) issuance of stop orders and refusal to issue building or occupancy permits on or about November 11, 1976, for lots 11 through 21, and prevention of the completion of the main road serving the subdivision; (2) enforcement of a moratorium on the issuance of building or occupancy permits beginning on May 14, 1977; (3) issuance of stop orders and refusal to issue building or occupancy permits on other occasions; (4) refusal in January 1977 to consider approving an agreement between Giacobbe and the Madonnas which made provision for the detention of storm water from the subdivision on the Madonna property; (5) requiring Giacobbe in 1978 to reengineer storm water detention for the subdivision in a manner which forced him to use an addition lot, lot 18, to detain storm water; (6) refusal to issue building permits for lots 7 and 8 after the reengineering of the storm water detention even though those lots were no longer necessary for that purpose; and (7) refusal to permit Giacobbe to guaranty his obligations under the agreement with a letter of credit and requiring him instead to establish a cash escrow.

In count II of the fourth amended counterclaim, Giacobbe and Woodside alleged as follows. At about the same time the City annexed the subdivision, Giacobbe and the Madonnas entered into an oral agreement which would have allowed Giacobbe to locate the storm water detention basin for the subdivision on the Madonna property. Throughout 1976, Giacobbe and the Madonnas advised Mayor Greer and the seven City council members named as counterdefendants of this oral agreement on several occasions, including various City council and council subcommittee meetings.

The individual counterdefendants told Giacobbe and the Madonnas that despite the favorable recommendations of the City’s engineers, the mayor and council would never approve the oral agreement while the lawsuit by the Madonnas against the City remained pending. Those counterdefendants refused to consider approving the oral agreement, causing the Madonnas to breach it. Count II further alleged that the individual counterdefendants intentionally, maliciously, and without legal justification induced this breach of the oral agreement between Giacobbe and the Madonnas. Count III contained essentially the same allegations, but accused both the City and the other counterdefendants of intentionally, maliciously, and without legal justification of interfering with the prospective business relationship between Giacobbe and the Madonnas.

Giacobbe and Woodside alleged in count IV that the individual counterdefendants intentionally, maliciously, and without legal justification induced the City to breach the annexation agreement by taking certain actions. These included: (1) causing stop orders to be issued which halted work on required subdivision improvements and prevented completion of construction of single-family residences in the subdivisions; (2) refusing to issue building permits and occupancy certificates for residences being constructed or to be constructed in the subdivision; (3) refusing to consider approving the agreement between Giacobbe and the Madonnas; (4) requiring Giacobbe to reengineer storm water detention for the property; (5) refusing to issue building permits for lots 7 and 8 even though they were no longer necessary for water detention; and (6) refusing to allow Giacobbe to guaranty performance of his obligations under the agreement with a letter of credit and, instead, requiring him to establish a cash escrow.

On August 25, 1988, the trial court entered an order dismissing the fourth amended counterclaim. Giacobbe and Woodside subsequently filed a motion for entry of a finding by the trial court that no just reason existed to delay enforcement of or appeal from the dismissal order. The trial judge granted the motion and made the requested finding in an order dated September 20, 1988. Giacobbe and Woodside then filed a timely notice of appeal from the dismissal order.

Although pleadings are to be construed liberally with a view of doing justice between the parties (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 603(c)), this does not lessen plaintiff’s obligation to plead facts necessary for recovery under the complaint. (Kirk v. Michael Reese Hospital & Medical Center (1987), 117 Ill. 2d 507, 516.) A complaint fails to state a cause of action if it does not contain factual allegations of every fact that must be proved in order for plaintiff to be entitled to a judgment in his or her favor. (Beckman v. Freeman United Coal Mining Co. (1988), 123 Ill. 2d 281, 287; In re Beatty (1987), 118 Ill. 2d 489, 499.) If a complaint does not contain sufficient factual averments and set out every fact essential to be proved, any deficiencies may not be cured through liberal construction. Beckman, 123 Ill. 2d at 287; Beatty, 118 Ill. 2d at 499.

We will first consider the sufficiency of the allegations in count I that the City breached the terms of the annexation agreement with Giacobbe. A complaint alleging breach of contract must contain factual allegations of the existence of a valid contract, breach of the contract by defendant, resultant injury to plaintiff, and performance by plaintiff. (Allstate Insurance Co. v. Winnebago County Fair Association, Inc. (1985), 131 Ill. App. 3d 225, 233.) In our opinion, count I does not sufficiently allege that the City breached the annexation agreement.

Several of the alleged breaches of contract by the City concern the issuance of orders to stop work on the project and the refusal to issue building permits or occupancy certificates. Woodside and Giacobbe failed to allege sufficient facts to establish that these actions were breaches of the annexation agreement. Paragraph 5 of the agreement did not prohibit the City from issuing stop orders for the project; it merely provided that if the City did so, it would have to specify the section of the City code that Giacobbe and Woodside violated and also specify the necessary corrective measures. There were no facts pleaded in the fourth amended counterclaim which indicate that the City did not comply with these requirements of paragraph 5 when it issued the stop orders.

Under paragraph 7 of the agreement, the City was required to issue building permits only if Giacobbe and Woodside submitted plans for the homes in accordance with City ordinances and if their plans for public improvements had been approved by the City council. There were no facts alleged in count I indicating that Giacobbe and Wood-side had complied with these requirements.

We recognize, additionally, that all contracts contain implied covenants of good faith between the parties. (Osten v. Shah (1982), 104 Ill. App. 3d 784, 786.) Thus, if the City acted in bad faith in issuing stop orders or declining to issue building permits or occupancy certificates, this would constitute a breach of the annexation agreement. Giacobbe and Woodside failed to plead any facts which would indicate these actions were taken in bad faith, however.

Giacobbe and Woodside pleaded in count I that the City refused to issue building permits and occupancy certificates for certain lots and issued stop orders. As we have seen, these actions do not necessarily constitute breaches of the annexation agreement. Since Giacobbe and Woodside failed to plead the additional facts necessary to establish that these actions constituted breaches of the annexation agreement, the above allegations were insufficient to state a cause of action for breach of contract.

The other allegations of count I are also insufficient to state a cause of action for breach of contract. Giacobbe and Woodside alleged in count I that the City prevented completion of the main road serving the subdivision but did not plead any further facts tending to show this was a breach of contract. They also alleged that the City failed to consider approving an agreement between Giacobbe and the Madonnas to provide for storm water detention for the subdivision. Under subsection 2 of paragraph 3D of the annexation agreement, the City was only required to approve such an agreement between Giacobbe and the Madonnas if the engineering plans for the storm water detention basin to be located on the Madonna property had been approved by the City council and the County of Du Page. No facts were pleaded indicating this had occurred.

Woodside and Giacobbe also alleged that the City required them to use lot 18 of the subdivision for storm water detention, contrary to a utility plan attached as an exhibit to the annexation agreement. Although most of the annexation agreement is attached to the fourth amended counterclaim, the utility plan is not. None of the provisions of the utility plan are set forth in the fourth amended counterclaim. Accordingly, Giacobbe and Woodside failed to plead sufficient facts to support their allegation that the City breached the annexation agreement by compelling them to use lot 18 for storm water detention.

Woodside and Giacobbe also alleged that the City refused to allow them to guaranty their obligations under the annexation agreement with a letter of credit, requiring instead the establishment of a cash escrow. Paragraph 6 of the agreement stated that Giacobbe had the option of guaranteeing his obligations with a subdivision bond, an interest-bearing cash deposit with the City treasurer, or a straight-line letter of credit or letter of guaranty from any recognized lending institution in the form attached to the agreement as exhibit C. That exhibit was not attached to the fourth amended counterclaim, nor was it described in count I. No facts were alleged establishing that Giacobbe presented a letter of credit in the proper form to the City. Accordingly, the above allegations are insufficient to set forth a cause of action for breach of contract.

Count I was factually insufficient because Giacobbe and Woodside failed to plead every fact they would need to prove in order to establish that the City breached the annexation agreement. Accordingly, the dismissal of count I was proper.

In count II, Giacobbe and Woodside allege that the individual defendants tortiously interfered with their contractual relation with the Madonnas. They alleged in count III that all counterdefendants tortiously interfered with their business expectancy relating to the Madonnas. In count IV, they alleged that the individual counter-defendants tortiously interfered with their contractual relations with the City.

The elements of tortious interference with a business expectancy are that: (1) plaintiff has a valid business expectancy; (2) defendant has knowledge of the expectancy; (3) defendant intentionally interferes with the prospective business relationship and prevents its realization; and (4) resultant damage to plaintiff. (Stefani v. Baird & Warner, Inc. (1987), 157 Ill. App. 3d 167, 175.) The elements of tortious interference with contractual rights are: (1) the existence of a valid, enforceable contract between plaintiff and another; (2) defendant’s awareness of this contractual relationship; (3) intentional and unjustified inducement by defendant of a breach of the contract; (4) a breach of the contract as a result of defendant’s wrongful acts; and (5) resultant damage to plaintiff. (HPI Health Care Services, Inc. v. Mt. Vernon Hospital, Inc. (1989), 131 Ill. 2d 145, 154-55.) These two torts are closely allied with each other since both stem from a recognition that a person’s business relationships constitute a property interest which should be protected from unjustified interference. Belden Corp. v. InterNorth, Inc. (1980), 90 Ill. App. 3d 547, 551.

In intentional interference with contract cases, courts will recognize a privilege if defendant was acting to protect an interest which the law considers to be of equal or greater value than plaintiff’s contractual rights. (HPI, 131 Ill. 2d at 157.) A defendant protected by such a privilege is not justified in engaging in conduct completely unrelated or antagonistic to the interest which gave rise to the privilege. (HPI, 131 Ill. 2d at 158.) If a privilege exists in defendant’s favor, plaintiff must allege facts from which it is reasonable to infer that defendant’s conduct was unjustified. HPI, 131 Ill. 2d at 158.

Our supreme court has recognized a privilege in intentional interference with contract cases in favor of corporate officers and directors to use their best business judgment and discretion on behalf of their corporations. (See Swager v. Couri (1979), 77 Ill. 2d 173, 190-91.) It would seem appropriate to recognize such a privilege for municipal officers to use their best judgment and discretion on behalf of their municipalities. In Mahoney Grease Service, Inc. v. City of Joliet (1980), 85 Ill. App. 3d 578, the court stated that as a general rule, members of legislative bodies cannot be held personally liable for damages based upon their exercise of discretion. (Mahoney, 85 Ill. App. 3d at 581.) The court stated that “the officers of a municipal corporation, like those of a private corporation, are agents of the corporate body and are shielded from personal liability for their ordinary acts in behalf of and for the corporate body.” 85 Ill. App. 3d at 582.

Several provisions of the Local Governmental and Governmental Employees Tort Immunity Act (Act) (Ill. Rev. Stat. 1987, ch. 85, par. 1 — 101 et seq.) also support the recognition of such a privilege. Under sections 2 — 103 and 2 — 205 of the Act (Ill. Rev. Stat. 1987, ch. 85, pars. 2 — 103, 2 — 205), local public entities and public employees are not liable for any injury caused by their failure to adopt an enactment or to enforce any law. Under section 2 — 201 of the Act (Ill. Rev. Stat. 1987, ch. 85, par. 2 — 201), public employees serving in positions involving policy determination or the exercise of discretion are not liable for acts or omissions in determining policy when acting in the exercise of such discretion.

The principle behind legislative immunity and immunity for other public officials is that it will be difficult for public officials to carry out their duties if they are constantly faced with the threat of lawsuits from those who are adversely affected by their discretionary decisions. (Fryman v. JMK/Skewer, Inc. (1985), 137 Ill. App. 3d 611, 615.) The aforementioned provisions of the Act do not apply to acts resulting from corrupt or malicious motives. (Idlehour Development Co. v. City of St. Charles (1980), 88 Ill. App. 3d 47, 52.) Nevertheless, we believe these provisions make it clear that the interest served by limiting the liability of public officials and their exposure to the threat of lawsuit for discretionary acts is at least equal in value to counter-plaintiffs’ contractual rights. We therefore conclude that the individual counterdefendants were protected by a privilege. Under the HPI holding, Giacobbe and Woodside were required to plead facts from which it could reasonably be inferred that the conduct of the individual counterdefendants was not justified.

We note that in HPI, plaintiff alleged intentional interference with contractual relations, and our supreme court did not specifically indicate whether its holding applied to allegations of intentional interference with business expectancies. Because of the close relationship between these two torts (Belden Corp v. InterNorth, Inc. (1980), 90 Ill. App. 3d 547, 551), we conclude that the same pleading requirement exists with regard to intentional interference with business expectancies when a privilege applies. Woodside and Giacobbe were therefore required to plead facts from which it would be reasonable to infer that the conduct of the individual counterdefendants was not justified in counts II, III, and IV.

Woodside and Giacobbe failed to allege such facts. The primary allegation of counts II and III is that the individual counter-defendants told Giacobbe and the Madonnas that they would not approve the oral agreement between those parties providing for storm water detention on the Madonna property while the Madonna lawsuit against the City was pending. There are no pleaded facts that would indicate this alleged refusal resulted from corrupt or malicious motives and was not an action undertaken in the interest of the City. Indeed, it would appear on its face that such an action was in the City’s interests when the City was being sued by the Madonnas for its alleged role in allowing storm water to run onto the Madonna property. Counts II and III do not contain sufficient facts to adequately allege lack of justification.

Count IV suffers from the same deficiency. Giacobbe and Wood-side alleged in that count that the individual counterdefendants induced a breach in the annexation agreement by taking certain actions including refusal to consider or approve the oral agreement with the Madonnas, issuance of stop orders for the project, refusal to issue building permits and occupancy certificates, requiring Giacobbe to reengineer storm water detention for the subdivision, and requiring a cash escrow to be established by Giacobbe to guaranty his obligations under the annexation agreement, instead of allowing him to do so with a letter of credit. There are no facts pleaded, however, from which it could be inferred that these actions resulted from corrupt and malicious motives rather than the belief they were in the City’s best interests. Accordingly, count IV failed to state a cause of action.

Counts II, III, and IV were properly dismissed as to the individual counterdefendants. Count III, which alleged intentional interference with business expectancies, was also brought against the City. Under section 2 — 109 of the Act, however, “[a] local public entity is not liable for an injury resulting from an act or omission of its employee where the employee is not liable.” (Ill. Rev. Stat. 1987, ch. 85, par. 2 — 109.) Since the individual counterdefendants, who were allegedly acting as employees of the City, could not be held liable under the allegations of the fourth amended counterclaim, the City also could not have been held liable. Count III was properly dismissed as to all counterdefendants.

Finally, Giacobbe and Woodside argue that, even if the fourth amended counterclaim was correctly dismissed, the trial court should have granted them leave to further amend their counterclaim. This contention is completely without merit. Giacobbe and Woodside never sought leave to amend their fourth amended counterclaim in the trial court and have therefore waived this issue for purposes of review. Cuerton v. Abbott Laboratories, Inc. (1982), 111 Ill. App. 3d 261, 267; Criscione v. Sears, Roebuck & Co. (1978), 66 Ill. App. 3d 664, 670.

Accordingly, the judgment of the circuit court of Du Page County is affirmed.

Affirmed.

INGLIS and NASH, JJ., concur.


source: Caselaw Access Project

author: PRESIDING JUSTICE UNVERZAGT

license: Public Domain

text:
    MARIAN H. (POLK) FRIED et al., Plaintiffs-Appellants, v. POLK BROTHERS, INC., et al., Defendants-Appellees.
    Second District
    No. 2—89—0066
    Opinion filed November 9, 1989.

      Peter N. Weil, Herbert Beigel, and Lewis S. Sandler, all of Beigel & Sandler, of Chicago, Costigan & Wollrab, of Bloomington, and Wollrab & Associates, P.C., of Boulder, Colorado (Stephen D. Sharp, of counsel), for appellants.
    John L. Snyder and David B. Goroff, both of Hopkins & Sutter, of Chicago (Michael M. Conway, of counsel), for appellees.
   PRESIDING JUSTICE UNVERZAGT

delivered the opinion of the court;

The plaintiffs, the widow and three sons of David H. Polk (the heirs), appeal the dismissal of their six-count complaint against the defendants alleging the erroneous valuation in David Polk’s estate of the stock owned by him at the time of his death in April 1955. The complaint was dismissed on the grounds it was barred by the statute of limitations and principles of res judicata. (Ill. Rev. Stat. 1987, ch. 110, pars. 2—619(a)(4), (a)(5).) The heirs contend their complaint was improperly dismissed on those grounds and that the trial court abused its discretion in denying them discovery and leave to amend their complaint. We affirm.

David Polk was one of six Polk siblings who owned all the shares in the three closely held defendant corporations, Polk Bros., Inc., Cafco Builders, Inc., and Rand Realty and Development Co., Inc., as of 1955. At the time the complaint was filed, Sol Polk (another of the six Polk siblings), Michael A. Crane and Lester Bachmann were the directors and officers of the defendant corporations and of the Polk Foundation allegedly funded in 1957 with the stock acquired from David Polk’s estate. Sol Polk’s executors were later substituted as party defendants in his stead below. In addition to David and Sol, the Polk siblings included brothers Harry, Samuel and Morris and their sister, Goldie Luftig.

David Polk’s will nominated and appointed his brother, Samuel H. Polk, as executor. It further directed that his executor employ the law firm of Wisch, Crane, and Cotter to probate the estate. When David Polk died, the stock he owned in the defendant corporations was sold pursuant to the terms of his will which, in turn, directed that the stock be sold by his executor according to amended written survivor-ship agreements he had executed incident to the defendant corporations. Under these amended survivorship agreements, the surviving siblings and/or the defendant corporations had the option of buying the deceased sibling’s shares of stock at the book value of the net assets of the respective corporations as of the close of the fiscal year preceding the date of death (in the case of Polk Bros.) or as shown by the semiannual balance sheet (in the case of Cafco) or the last balance sheet (in the case of Rand Realty) plus, in the case of Polk Bros., 1% of the net sales during the current fiscal year up to the date of death. Of 5,000 shares of Polk Bros, common stock, David Polk owned 700; of 9,500 shares of Rand Realty common stock, he owned 1,330; of 500 shares of Cafco preferred stock he owned 70; and of 1,480 shares of Cafco common stock, he owned 207. The value of the stock was to be determined by the auditor or accountants regularly employed by the corporation, and the valuation was to be binding on the parties, their heirs, representatives, administrators and executors. The accountants regularly employed by the defendant corporations were Beckerman, Terrell and Co.

Plaintiff Marian Polk Fried petitioned the probate court for admission of David Polk’s estate to probate on May 16, 1955. She swore under oath at the time that she knew the contents of the petition and the statements therein were true. She petitioned that Samuel Polk, David Polk’s named executor, be appointed as such, stating that he was “qualified and willing to act as executor.”

On October 24, 1955, Samuel Polk, as executor, filed with the probate court a petition for approval of the sale of David Polk’s stock in the corporate defendants according to the terms of the amended survivorship agreements. In pertinent part, it was alleged therein:

“THAT BECKERMAN, TERRELL AND CO., certified public accountants, regularly employed by said POLK BROS., CAFCO BUILDERS, INC. AND RAND REALTY AND DEVELOPMENT CO. on October 4, 1955, certified that in accordance with the provisions of the survivorship agreements *** and the Articles of Incorporation and the By-Laws of RAND REALTY AND DEVELOPMENT CO., that the total value of this stock interest which said DAVID D. POLK, Deceased, had in POLK BROS. CENTRAL APPLIANCE AND FURNITURE CO., and its subsidiaries aggregate the sum of $430,719.94; CAFCO BUILDERS, INC., the sum of $52,127.04; and in RAND REALTY AND DEVELOPMENT CO., the sum of $147,132.57.”

Beckerman’s certification showed an adjusted net worth of Polk Bros, as of June 30, 1954, of $1,786,967.06. Added to that was $338,471.67, representing 1% of the current fiscal year’s net sales of $33,847,167.26 up to April 30, 1955. The sum of those two figures, $2,125,438.73, divided by 5,000 shares, yielded a per share value of $425.08. The final aggregate valuation for Polk Bros, stock of $430,719.94 includes the book value of David Polk’s shares of common stock in two subsidiaries of Polk Bros, as well.

The same day the petition was filed, the probate court entered its order finding the matters contained in the executor’s petition to be true and approving the sale of David Polk’s stock at the valuation specified. The court’s order expressly declared the right of Polk Bros, and Cafco to purchase and acquire David Polk’s stock interests in said corporations and, further, that Rand Realty also had a right to purchase and acquire the stock interest David Polk had in that corporation. All told, the estate was entitled to receive in excess of $625,000 for David Polk’s shares in the corporate defendants.

On July 2, 1956, Marian Polk Fried, as a cotrustee of David Polk’s estate, acknowledged the receipt from the executor of all of the assets on hand from the final account of David Polk’s estate. The other heirs, then minor children, were represented in the estate by court-appointed guardians ad litem for proof of will and final report. Richard L. Phelan as guardian ad litem approved the executor’s final account and report, certifying that he had examined it and had no objection thereto. The estate was closed in 1956. Thirty-one years later, in December 1987, David Polk’s heirs filed the instant suit in McLean County, Illinois, and the cause was later transferred on defendant’s motion to Lake County, Illinois.

The heirs’ six-count complaint alleged in pertinent part that prior to and after the death of David Polk, Sol Polk directly or indirectly retained the services of attorney Benjamin Crane and accountants Beckerman, Terrell and Co. to handle all of his personal business, the business of the defendant corporations and the estates of the then-deceased Polk brothers David, Harry, Samuel and Morris, thereby creating a fiduciary duty in Sol Polk and those he dominated to the families of the deceased brothers; that prior to December 1948 the Polk siblings, accountants and attorney had been and were at the time of David Polk’s death under the domination and direction of Sol Polk; that the formula for determining the value of the stock which could be acquired by surviving siblings was mandated by Sol Polk without discussion, negotiation or information and the survivorship agreements were entered into only because “Sol Polk had ordered it and he ruled by edict to the exclusion of others”; that David Polk’s stock in the defendant corporations was erroneously evaluated in his estate in that the evaluations were not the true market value of David Polk’s 700 shares which would presently have been worth in excess of $26 million; that Sol Polk and Goldie Luftig are the sole surviving siblings, the survivor of whom would be entitled to claim the stock of the predeceased siblings, and that prior to and subsequent to the death of David Polk, vast inequities have occurred such as the payment to Sol Polk of a $1 million salary per annum; that the stock of David Polk was acquired and used in May 1957 to fund the Polk Foundation, ostensibly a charitable organization, with present assets in excess of $40 million; that Sol Polk, Michael A. Crane and Lester Bachmann are interested parties to the action because of their control of the assets of the defendant corporations and the Polk Foundation inasmuch as the transfers of stock were fraudulent and void; that due to the conspiracy of silence established by Sol Polk, the heirs have and had no knowledge about the deception alleged until the filing in 1987 of the pending lawsuit by Polk Bros, against Bruce Bachmann as Goldie Luftig’s guardian seeking to acquire the stock of Goldie Luftig; and that the transfer of the ownership of David Polk’s stock is void, ownership should remain in the heirs and they are entitled to the present value thereof set off by amounts already received or, alternatively, to the true value of the stock at the time of David Polk’s death, less amounts received, plus a reasonable sum representing the income which would have been derived therefrom. It was further alleged that the heirs’ complaint was based on their best information and belief inasmuch as the defendants refused to divulge information requested as part of a continuing conspiracy of silence. In each of the six counts, the heirs prayed for judgment against each of the corporate and individual defendants in the amount of $25,400,000.

The defendants filed a motion to dismiss pursuant to section 2— 619 of the Civil Practice Law based on the grounds of res judicata and the statute of limitations. (Ill. Rev. Stat. 1987, ch. 110, pars. 2— 619(a)(4), (a)(5).) Plaintiffs responded, defendants replied, the court heard arguments, and it granted the motion to dismiss on both grounds asserted.

The heirs argue res judicata does not apply because the instant proceedings present a different cause of action than that presented in the probate proceedings; the defendants were not parties to the probate proceeding; the issue of the defendants’ fraud was never litigated in the probate proceeding; and they did not have a full and fair opportunity to litigate valuation in those proceedings.

The doctrine of res judicata provides that a final judgment on the merits rendered by a court of competent jurisdiction bars any subsequent actions between the same parties or their privies on the same claim, demand or cause of action. (Kinzer v. City of Chicago (1989), 128 Ill. 2d 437, 446; Thorleif Larsen & Son, Inc. v. PPG Industries, Inc. (1988), 177 Ill. App. 3d 656; Toepper v. Cooker (1986), 150 Ill. App. 3d 206.) The doctrine is based on the public policy which favors judicial economy and the finality of litigation (Spiller v. Continental Tube Co. (1983), 95 Ill. 2d 423; In re Marriage of Potts (1989), 186 Ill. App. 3d 273, 275) and is divided into two branches: res judicata, or estoppel by judgment, and collateral estoppel, or estoppel by verdict (Potts, 186 Ill. App. 3d at 276; Reynolds Metals Co. v. V.J. Mattson Co. (1984), 125 Ill. App. 3d 554). Collateral estoppel is also referred to as “issue preclusion.” People v. Moore (1989), 184 Ill. App. 3d 102, 104.

The essential elements of the first branch, res judicata, are an identity of parties, subject matter and cause of. action. (Bismarck Hotel Co. v. Sutherland (1988), 175 Ill. App. 3d 739.) The test for determining whether two causes of action are the same for res judicata purposes is whether they are based on the same facts or whether the evidence necessary to sustain the second cause would have sustained the first cause. (Thorleif Larsen & Son, Inc., 177 Ill. App. 3d at 659; Cangas v. Marcus Auto Lease Corp. (1988), 176 Ill. App. 3d 127.) Res judicata applies not only to those issues which were actually raised in the first proceeding, but also to any issue which might have been raised in that proceeding. Potts, 186 Ill. App. 3d at 276; Thorleif Larsen & Son, Inc., 177 Ill. App. 3d at 659; Benton v. Smith (1987), 157 Ill. App. 3d 847.

The second branch, collateral estoppel, applies when a party, or someone in privity therewith, takes part in two separate, consecutive cases arising from different causes of action and some fact controlling, or question material to, the determination of both cases has been adjudicated against that party in the prior case by a court of competent jurisdiction. (Buttitta v. Newell (1988), 176 Ill. App. 3d 880; Service Systems Corp. v. Van Bortel (1988), 174 Ill. App. 3d 412.) Unlike res judicata, collateral estoppel bars subsequent actions only as to the point or question actually litigated and determined in the prior suit, and not as to other matters which might have been litigated and determined. (Benton, 157 Ill. App. 3d at 853.) Also unlike res judicata, mutuality of parties is not required; only one party or his privy, the one against whom estoppel is asserted, must be identical in the first and subsequent causes of action. (Service Systems Corp., 174 Ill. App. 3d at 419.) Moreover, collateral estoppel will not be applied unless it appears that the party against whom the estoppel is asserted had a full and fair opportunity to litigate the issue in the prior proceeding. (Coronet Insurance Co. v. Booker (1987), 158 Ill. App. 3d 466, 471.) Whether a party has had a full and fair opportunity to be heard depends on whether the party was denied a procedural, substantive or evidentiary opportunity to be heard on the issue. (Fred Olson Motor Service v. Container Corp. of America (1980), 81 Ill. App. 3d 825, 830.) The parties need not have been arrayed on opposite sides in the prior suit, nor must formal issues have been raised between them. Pechous v. Field Enterprises, Inc. (1983), 114 Ill. App. 3d 605, 608.

To be effective as a prior adjudication, the first action must result in a final judgment on the merits. (Relph v. Board of Education (1981), 84 Ill. 2d 436.) A judgment is on the merits in the sense that it may be pleaded in bar of a subsequent action where it amounts to a decision as to the respective rights and liabilities of parties based on the ultimate facts or the state of the facts disclosed by pleadings or evidence, or both, and on which the right of recovery depends irrespective of formal, technical or dilatory objections or contentions. (Foreman v. Martin (1975), 26 Ill. App. 3d 1028; Lytton v. Cole (1964), 54 Ill. App. 2d 161, 175.) One is not estopped or barred by a prior adjudication if he was not a party to such action and does not stand in a relation of privity to one who was a party. (City of Naperville v. Morgan (1984), 126 Ill. App. 3d 91.) “Privity” for res judicata or collateral estoppel purposes contemplates a mutual or successive relationship to some property rights which were the subject matter of the prior litigation. Simcox v. Simcox (1988), 175 Ill. App. 3d 473, appeal allowed (1989), 124 Ill. 2d 562.

As to the first branch of res judicata, estoppel by judgment, we agree with the heirs that the instant cause is not the same cause of action as the probate proceeding. Applying the test for determining whether the two causes of action are the same, the evidence necessary to sustain the present cause of action includes facts which were not present in the probate proceeding, and this same evidence would not have sustained the first cause. A case which illustrates when two causes of action may be found to be the same for res judicata purposes is Thorleif Larsen & Son, Inc. v. PPG Industries, Inc. (1988), 177 Ill. App. 3d 656. There, the plaintiff’s prior suit in Cook County to foreclose on a mechanic’s lien, which was dismissed, was found to be essentially the same cause of action as the plaintiff’s suit filed in DuPage County on the underlying contract. This court found the defendant there had acquiesced in the plaintiff’s splitting of the cause of action, however, and declined to apply the doctrine of res judicata, which would have deprived the plaintiff of any remedy whatsoever. In the case at bar, there is no identity of the causes of action in the probate proceeding and in the heirs’ instant complaint. Moreover, it is clear that not all the defendants here were parties to the probate proceeding even assuming, arguendo, as the defendants contend, the corporate defendants were parties there inasmuch as their right to repurchase David Polk’s stock at the value certified was determined there. Also, unlike Hooks v. Bonner (1989), 187 Ill. App. 3d 944, cited with our leave as supplemental authority by the defendants, neither Samuel Polk, nor Benjamin Crane, nor Beckerman, Terrell & Co. — all parties in the probate proceeding — are named defendants here. Accordingly, we conclude there was no basis for dismissal of the heirs’ complaint on the ground of estoppel by judgment.

We do agree with the defendants, however, that dismissal was proper on the alternate ground of estoppel by verdict or collateral estoppel. As noted above, collateral estoppel applies when a party takes part in two separate, consecutive cases arising from different causes of action and some fact controlling, or question material to, the determination of both cases has been adjudicated against that party in the prior case. (Buttitta v. Newell (1988), 176 Ill. App. 3d 880.) Mutuality of parties is not a prerequisite to the application of collateral estoppel (Ogle v. Fuiten (1983), 112 Ill. App. 3d 1048, 1051, aff’d (1984), 102 Ill. 2d 356), and it may be applied as long as the party against whom application of the doctrine is sought is identical in both actions and had a full and fair opportunity to litigate the issue which was necessarily determined in the prior proceeding. Daniel v. Village of Hoffman Estates (1987), 165 Ill. App. 3d 772; Coronet Insurance Co. v. Booker (1987), 158 Ill. App. 3d 466.

First, the parties against whom the defendants seek application of the doctrine of collateral estoppel are the heirs, plaintiffs here. The heirs were also parties to the probate proceeding. Second, a question material to the determination of both causes — the value of the stock in the estate — was decided in the probate proceeding contrary to the position taken by the heirs in the present cause that the true market value of the stock was many times more the value of it as determined in the probate proceeding.

The heirs argue that the issue of the defendants’ fraud and/or breach of fiduciary duty raised in their instant complaint was not actually litigated in the probate proceedings and, thus, collateral estoppel should not be applied to prevent the instant cause from going forward. The heirs claim this fact is the critical feature distinguishing the present cause from Lytton v. Cole (1964), 54 Ill. App. 2d 161, which was relied on by the defendants and the trial judge in support of dismissal. In Lytton, six years after the estate was closed, the principal beneficiary, Walter Lytton, sued the executors of the estate for the fraud they allegedly perpetrated in suppressing the value of the shares in the estate in order to sell the stock at a low price to friendly individuals so that the executors could maintain control of the Lytton's Department Store. Dismissal of the fraud suit on res judicata grounds was affirmed on review where it appeared from the record that all the facts alleged in the amended fraud complaint were formerly adjudicated in the probate court by virtue of the beneficiaries’ petition there to remove the executors. Although that petition was denied, and the word “fraud” was not used there, in making its decision to deny the petition to remove the executors, the probate court necessarily considered the beneficiaries’ accusation that the executors breached their fudiciary duty by conspiring to sell the Lytton’s stock held by the estate at a low price to friendly persons controlled by them. Accordingly, the court found the beneficiaries’ present action was barred under the doctrine of res judicata.

As the defendants point out, the heirs’ contention that none of the issues raised in the present complaint were ever raised in any manner during the probate proceedings is not true. The valuation of the stock — which is the cornerstone of the heirs’ present complaint— actually was decided in the probate proceeding. In seeking to avoid the application of Lytton, the heirs argue that their theory on appeal is not that the wrong method of valuation was used but, rather, that false figures were used in computing the book value due to the defendants’ fraud. The heirs’ complaint does not allege this theory, however. Rather, it alleges the evaluation was erroneous because it did not reflect the “true market value” which, they allege, was many times more. It is well settled that the theory upon which the case was submitted to the trial court is treated as the law of the case on appeal and a theory not presented to the trial court is waived for purposes of appeal. (Burys v. First Bank (1989), 187 Ill. App. 3d 384; Cosentino v. Price (1985), 136 Ill. App. 3d 490.) Moreover, on appeal from dismissal of a complaint, a plaintiff cannot argue or rely upon facts which are totally absent from the complaint. Hulse v. Kirk (1975), 28 Ill. App. 3d 839, 846.

The heirs’ further argument that collateral estoppel does not apply because they did not have a full and fair opportunity to litigate the valuation of the stock in the probate proceeding because no evidentiary hearing was held there is without merit. As noted in Lytton, “it is not necessary that the prior adjudication be based on facts proved, but it is sufficient that the judgment was based on facts alleged and admitted.” (Lytton, 54 Ill. App. 2d at 176.) Here, in her sworn petition to the probate court, Marian Polk Fried requested the admission of David Polk’s estate to probate and the appointment of Samuel Polk as executor thereof, stating that he was qualified and willing to act as executor. Upon Samuel Polk’s verified petition representing the valuation of David Polk’s stock in the defendant corporations according to the terms of David Polk’s will was the book value of the defendant corporations plus, in the case of Polk Bros., 1% of the current fiscal year’s net sales, the court found the values of the respective stocks to be as certified. Further, Marian Polk Fried acknowledged receipt from the executor of all of the assets on hand from the final account of David Polk’s estate. Similarly, the guardian ad litem of the remaining heirs certified he examined the executor’s final account and report and had no objection thereto. Samuel Polk’s petition clearly alleged the method of valuation of the stock as provided for in the survivorship agreements referred to in David Polk’s will. Moreover, the accountants’ certification of the value of the stock included in the record very clearly was based on summary figures shown for net assets and net sales of the defendant corporations which neither Marian Polk Fried nor Samuel Polk nor the minor heirs’ guardian ad litem questioned.

In sum, we believe the record shows the heirs had a full and fair opportunity to litigate the valuation of the stock which was necessarily determined in the probate proceeding. That they did not avail themselves of the opportunity to do so does not militate against collaterally estopping them from doing so now. We conclude the court did not err in dismissing the heirs’ complaint on the ground of collateral estoppel. Inasmuch as the trial court’s judgment may be sustained on any basis justified by the record (Zonta v. Village of Bensenville (1988), 167 Ill. App. 3d 354), we find it unnecessary to consider whether the dismissal could also be sustained on the ground that the heirs’ complaint was time barred.

The heirs’ final contentions are that the trial court abused its discretion by denying them discovery and leave to file an amended complaint.

They rely on Smith v. St. Therese Hospital (1980), 87 Ill. App. 3d 782, in support of their argument that the court abused its discretion in denying them discovery pending its decision on the defendants’ motion to dismiss. As defendants argue, Smith is distinguishable. The basis for the defendants’ motion to dismiss in Smith was based on section 48(l)(i) (Ill. Rev. Stat. 1977, ch. 110, par. 48(l)(i)), which is presently codified as section 2 — 619(a)(9) (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 619(a)(9)). That section provides as a ground for dismissal that the claim or demand is barred by “other affirmative matter” avoiding the legal effect of or defeating the claim or demand. The trial court was found to have abused its discretion in dismissing the plaintiff’s motion there because defendant’s alleged affirmative matter did not amount to an affirmative defense. Rather, the matter alleged — that the plaintiff’s bill of particulars showed she only had evidence implicating another defendant as manufacturer of the drug which she had ingested and reacted to causing her vision impairment-amounted to nothing more than evidence upon which the defendant expected to contest a material fact stated in the complaint. Accordingly, dismissal under section 48(l)(i) was found to be improper. Moreover, the trial court was found to have abused its discretion in acting on the motion to dismiss before the plaintiff could reasonably complete her efforts to discover the source of the drug administered to her.

There is no question that the grounds for the dismissal here, res judicata and the statute of limitations, are affirmative defenses. Further, unlike Smith, there was no factual dispute here as to what was decided in the probate proceedings, no dispute that the valuation and • sale of the stock took place in 1956 and no dispute that the heirs’ suit was filed in 1987. The heirs, in fact, do not argue how they were prejudiced by the court’s denial of discovery. A party asserting reversible error must provide a clear showing of prejudice inasmuch as a court of review will not presume that the error affected the outcome of the hearing. (Schaffner v. Chicago & North Western Transportation Co. (1987), 161 Ill. App. 3d 742.) Accordingly, we conclude the court did not abuse its discretion in denying the heirs’ discovery prior to considering the defendants’ motion to dismiss.

We also agree with the defendants that the court did not abuse its discretion in denying the heirs leave to file an amended complaint where the heirs did not tender a proposed amendment to the trial court so as to allow this court to assess whether they were prejudiced by the court’s refusal (Hassiepen v. Marcin (1974), 22 Ill. App. 3d 433) and where they have made only vague footnote references here as to what amendments could have been made to “strengthen” the factual basis of the allegations in their complaint (Christensen v. Numeric Micro, Inc. (1987), 151 Ill. App. 3d 823, 831-32). Moreover, as defendants point out, the heirs had the opportunity under section 2 — 619 to challenge the motion to dismiss through the submission of affidavits or other proof establishing facts which would obviate the grounds for dismissal alleged by the defendants. (Ill. Rev. Stat. 1987, ch. 110, par. 2 — 619(c).) Although the heirs point to “additional facts” included in their response to the defendants’ motion to dismiss which they assert would have been pleaded in an amended complaint, most of the “facts” are mere conclusions or are unsupported by affidavits or other proof as required by section 2 — 619(c) of the Civil Practice Law.

We conclude the court did not abuse its discretion in denying the heirs discovery or leave to amend their complaint.

The judgment of the circuit court of Lake County is affirmed and costs awarded to defendants as requested.

Judgment affirmed.

REINHARD and WOODWARD, JJ., concur.


text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellant, v. GLENN P. FILITTI, Defendant-Appellee.
    Second District
    No. 2—88—0729
    Opinion filed November 9, 1989.

      James E. Ryan, State’s Attorney, of Wheaton (William L. Browers, of State’s Attorneys Appellate Prosecutor’s Office, of counsel), for the People.
    Mary Robinson and Josette Skelnik, both of Robinson & Skelnik, of Elgin, and Ronald R. Nosek, of Lombard, for appellee.
   JUSTICE DUNN

delivered the opinion of the court:

The State appeals from an order of the circuit court of Du Page County granting the motion of defendant, Glenn Filitti, to suppress evidence resulting from his arrest for driving under the influence of alcohol (Ill. Rev. Stat. 1987, ch. 95x/2, par. 11 — 501(a)(2)). On appeal, the State contends that the trial judge erroneously concluded it was barred from relitigating the issue of whether there was probable cause to arrest defendant when that issue had been resolved in defendant’s favor at a statutory summary-suspension hearing. We reverse.

Defendant was arrested on October 20, 1987. In addition to the aforementioned DUI charge, he was charged with having a blood-alcohol concentration of .10 or more (Ill. Rev. Stat. 1987, ch. 95x/2, par. 11 — 501(a)(1)) and driving while license suspended (Ill. Rev. Stat. 1987, ch. 95x/2, par. 6 — 303). On April 14, 1988, the circuit court held a hearing on defendant’s petition to rescind the statutory summary suspension of his driver’s license (see Ill. Rev. Stat. 1987, ch. 95x/2, par. 2 — 118.1). The court concluded that the arresting officer lacked reasonable grounds to believe defendant had been driving while under the influence of alcohol and granted the petition.

Defendant subsequently filed a motion to suppress evidence resulting from his arrest. The trial court heard no evidence with respect to this motion. The trial court granted the motion solely on the basis that the doctrine of collateral estoppel prohibited the State from relitigating the issue of whether the arresting officer had reasonable grounds to believe defendant had been driving under the influence of alcohol. The instant appeal ensued.

Two other appellate districts have recently considered the same issue raised in this appeal. The Appellate Court for the Fifth District held that the doctrine of collateral estoppel would apply and bar the State while contesting a motion to suppress in a DUI case from relitigating issues that had already been decided at a summary-suspension hearing. (People v. Moore (1989), 184 Ill. App. 3d 102, 106, appeal allowed (1989), 129 Ill. 2d 632.) The Appellate Court for the Fourth District had previously reached the opposite conclusion. See People v. Stice (1988), 168 Ill. App. 3d 662, 665, appeal denied (1988), 122 Ill. 2d 590.

The doctrine of collateral estoppel precludes relitigation of a factual issue that was previously adjudicated on the merits by a court of competent jurisdiction. (Fearon v. Mobil Joliet Refining Corp. (1984), 131 Ill. App. 3d 1, 6.) The following requisites must be met in order for the doctrine to apply: (1) the issue to be precluded is identical to the one previously decided; (2) the issue is a controlling fact or question in both cases; (3) a final judgment was rendered in the prior adjudication; and (4) the precluded party was a party or in privity with a party in the previous litigation. (Moore 184 Ill. App. 3d at 104.) Collateral estoppel applies in criminal proceedings (People v. Williams (1975), 59 Ill. 2d 557, 560), but should be applied in a rational, realistic manner rather than in a hyper-technical fashion. People v. Cartalino (1982), 111 Ill. App. 3d 578, 592.

Here, as in Moore, each of the above requisites for the application of collateral estoppel has been met. The trial court’s ruling at the summary-suspension hearing that there were no reasonable grounds to believe that defendant had been driving while under the influence of alcohol was tantamount to ruling there was no probable cause to arrest him. (See People v. Sanders (1988), 176 Ill. App. 3d 467, 470.) This was a controlling question at both the summary-suspension hearing and the motion to suppress. There was a final order in the summary-suspension proceeding, and the State was a party to both proceedings.

There are, however, exceptions to the doctrine of collateral estoppel. The doctrine will not be applied if the precluded party did not have a full and fair opportunity to litigate the issue or if its application would cause an injustice to the precluded party. (Collins v. St. Jude Temple No. 1 (1987), 157 Ill. App. 3d 708, 712.) Another exception is recognized if relitigation of the issue is warranted by differences in the quality or extensiveness of the procedures followed in the two courts. Restatement (Second) of Judgments §28(3) (1982).

Although the court did not specifically mention the latter exception in People v. Stice (1988), 168 Ill. App. 3d 662, it appears to have relied on a similar rationale in determining that collateral estoppel would not apply to bar the State from relitigating the issue of probable cause to arrest in a suppression hearing if the issue had been decided in defendant’s favor at a summary-suspension hearing. The court stated as follows:

“The purpose of the rescission hearing is to grant a prompt post-suspension review of the suspension so as to comply with due process requirements. (See Mackey v. Montrym (1979), 443 U.S. 1, 61 L. Ed. 2d 321, 99 S. Ct. 2612, People ex rel. Eppinga v. Edgar (1986), 112 Ill. 2d 101, 492 N.E.2d 187.) As such, the hearing is designed to be expeditious, and, in fact, allows for the evidence to be presented by means of the officer’s written report. (Ill. Rev. Stat. 1985, ch. 9572, par. 2— 118.1(b).) If collateral estoppel were applicable, then this desire for expediency would be defeated. While the State may be willing to rely on the police reports as evidence in a rescission hearing if the sole determination is possible rescission of the suspension, it will be much less likely to rely on those reports if the result would be suppression of evidence in a criminal DUI trial.” Stice, 168 Ill. App. 3d at 664-65.

Defendant argues that our supreme court’s recent decision in People v. Orth (1988), 124 Ill. 2d 326, undermined the rationale behind Stice. In Orth, the court ruled that defendant has the burden of proof at a summary-suspension hearing. (124 Ill. 2d at 338.) The court went on to hold that if defendant presents a prima facie case that breathalyzer results were inaccurate, the State could only avoid rescission by moving for admission of the test into evidence and laying the proper foundation. (124 Ill. 2d at 340.) This holding appears to have been motivated in large part by due-process concerns. 124 Ill. 2d at 336-37.

Orth does limit the ability of the State to rely upon the officer’s sworn statement as evidence of the breathalyzer results at a summary-suspension hearing. In many summary-suspension hearings, however, the breathalyzer results are not an issue. In some cases, the defendant refuses to take a breathalyzer or blood test. In others, such as the case at bar, the defendant contests probable cause to arrest or to make the initial stop of defendant’s vehicle. In cases such as these, Orth does not in any way restrict the ability of the State to rely upon the officer’s official reports as evidence at the summary-suspension hearing. We therefore reject defendant’s contention that Orth undermines the rationale behind Stice.

We agree with the conclusion of the court in Stice that a trial court’s determination at a summary-suspension hearing that there was no probable cause to arrest defendant should not preclude relitigation of the issue in a subsequent DUI proceeding, and we agree with the court’s reasoning. A contrary result would effectively eviscerate the provision allowing the State to rely upon the officer’s official reports at a summary-suspension hearing, since the State would be forced to call its witnesses in order to prevent an adverse ruling that would jeopardize the DUI prosecution.

Additionally, our supreme court has stated as follows:

“A motion to suppress is directed toward determining whether certain evidence should be admitted at trial; in many cases, suppression of the evidence results in a dismissal of the charges. However, when a defendant prevails in an implied-consent hearing, the decision does not effect the dismissal of the criminal charges, it serves only to stay the suspension of his driving privileges until the DUI proceedings are concluded.” (Koss v. Slater (1987), 116 Ill. 2d 389, 396.)

While the court in Koss did not consider the issue that is present in the instant case, the above language strongly supports the holding of the court in Stice. We also note that our supreme court has stated that the purpose of the statutory summary-suspension scheme is designed to protect people who travel the highways. (People v. Gerke (1988), 123 Ill. 2d 85, 94.) This purpose would hardly be served by permitting statutory summary-suspension proceedings to be used as a means of destroying the State’s case in the related DUI proceeding. For the above reasons, we conclude that the trial court erred by applying collateral estoppel and granting the motion to suppress.

Accordingly, the judgment of the circuit court of Du Page County is reversed, and the cause is remanded for further proceedings.

Reversed and remanded.

INGLIS and LINDBERG, JJ., concur.


author: JUSTICE WOODWARD

text:
    KENNETH CHESSICK, Plaintiff-Appellant, v. SHERMAN HOSPITAL ASSOCIATION, Defendant-Appellee.
    Second District
    No. 2—89—0550
    Opinion filed November 9, 1989.

      Kenneth Chessick, of Law Offices of Kenneth C. Chessick, M.D., of Schaumburg, appellant pro se.

    Wendell W. Clancy & Associates, of St. Charles (Wendell W. Clancy, of counsel), for appellee.
   JUSTICE WOODWARD

delivered the opinion of the court:

Plaintiff, Kenneth Chessick, a licensed physician and a licensed attorney at law, appeals from a trial court order denying his petition for a preliminary injunction against the defendant, Sherman Hospital Association.

While plaintiff maintains that the facts in this case are largely undisputed, defendant disagrees and has provided its own statement of facts. In addition, defendant has moved to strike plaintiff’s statement of facts as being in violation of Supreme Court Rule 341(e)(6) (113 Ill. 2d R. 341(e)(6)), which sets forth that the statement of facts

“shall contain the facts necessary to an understanding of the case, stated accurately and fairly without argument or comment, and with appropriate reference to the pages of the record on appeal.” 113 Ill. 2d R. 341(e)(6).

Defendant specifically complains that plaintiff has “mischaracterized” the record in this case in that plaintiff’s citations to the record do not support his statements of the facts in this case.

Where this court’s ability to review the issues in a given case is hindered by the content of the statement of facts, the statement of facts will be stricken. (See Certified Mechanical Contractors, Inc. v. Wight & Co. (1987), 162 Ill. App. 3d 391, 396.) While we do not disagree with the defendant’s criticism of plaintiff’s statement of facts, there are sufficient facts set forth to allow us to review the issues raised. Therefore, defendant’s motion to strike plaintiff’s statement of facts is denied. We turn now to the merits of plaintiff’s appeal.

Plaintiff brought suit against the defendant seeking a temporary restraining order, preliminary injunction, and a permanent injunction following defendant’s issuing of restrictions on plaintiff’s general surgery and gastrointestinal endoscopy privileges at Sherman Hospital. The plaintiff sought to enjoin the defendant from enforcing the restrictions on his privileges. After issuing several temporary restraining orders, the trial court conducted a hearing on plaintiff’s petition for the issuance of a preliminary injunction. The hearing revealed the following facts.

Since 1984, plaintiff had been an associate staff member at Sherman Hospital. He was reviewed for consideration of advancement to the status of associate attending staff. Under the defendant’s bylaws, a physician serves a one-year provisional period as an associate staff member. At the end of the year, the physician’s records are reviewed by the medical executive committee, which then recommends promotion, termination, or extending the probationary period. The probationary period can only be extended for a total of two years. Having been an associate staff member for two years, plaintiff was ineligible for further extension.

On February 24, 1987, the surgical medical care evaluation subcommittee recommended plaintiff’s advancement with certain restrictions, which included consulting and auditing requirements. Under the bylaws, the physician could then have an interview with the steering committee of his department. Dr. Joseph Michelotti, chairman of the surgical steering committee, invited the plaintiff to an interview to discuss the circumstances prompting the restrictions. Plaintiff, by letter, requested a list of specific, detailed criticisms of the alleged substandard care. Dr. Michelotti responded, also by letter, that the information had been provided. On June 24, 1987, the plaintiff appeared at the surgical steering committee meeting and again requested a written list of specific activities which constituted the grounds for the request for the corrective action. On July 24, 1987, the surgical steering committee met and recommended to the medical executive committee that plaintiff not be advanced to associate attending status, which in effect would result in his termination. The medical executive committee ratified the surgical steering committee’s recommendation.

Pursuant to the defendant’s bylaws, plaintiff requested a hearing before the ad hoc hearing committee. The committee is comprised of five members of the medical staff who have not “actively participated in the consideration of the adverse recommendation.” Also pursuant to the bylaws, notice of the date, time, and place of the scheduled hearings, as well as the charges and the basis for the corrective action, was given to the plaintiff.

The bylaws set forth how the hearing is to be conducted, as well as the rights of the participants. An accurate record of the meeting is required, either by use of a court reporter, electronic recording unit, detailed transcription, or by the taking of adequate minutes. The medical executive committee appoints one of its members or some member of the medical staff, in this case, Dr. Michelotti, to represent it at the hearing to present the facts in support of its adverse recommendation and to examine witnesses. Both parties have the right to call and cross-examine witnesses, to testify, and to introduce written evidence. However, the rules of evidence and examination of witnesses need not be strictly adhered to. Neither side is entitled to legal representation unless the ad hoc committee then permits both sides to be represented by counsel. Specifically, the bylaws provide:

“The Hearing Committee may, without special notice, recess the hearing and reconvene the same for the convenience of the participants or for the purpose of obtaining new or additional evidence or consultation. Upon the conclusion of the presentation of oral and written evidence the hearing shall be closed. The Hearing Committee may thereupon, at a time convenient to itself, conduct its deliberations outside the presence of the practitioner for whom the hearing was convened.”

In plaintiff’s case, the ad hoc committee met nine separate times to hear evidence. The record of these hearings was reported by a court reporter. It is uncontested that the members of the ad hoc committee, hospital administrator, and the hospital attorneys met for dinner prior to each hearing. No record of these “dinners” was kept. During the course of the hearings, the committee would recess into what were referred to as executive sessions. Plaintiff and his attorney did not attend the dinner meetings or attend the executive sessions, nor was a record made of these executive sessions by a court reporter.

At the outset of the hearings, Dr. Lewis, chairman of the ad hoc committee, outlined the attorney’s role as follows:

“The role for counsel for both sides will be strictly advisory and counsel may not actively participate in the presenting of evidence, questioning of witnesses, or addressing the committee. On occasion, the chairman [may] invite counsel to address the committee. Accordingly, I would appreciate that counsel only address the committee with the permission of the chair.”

Plaintiff voiced no objections to the dinners or executive sessions. However, at the last recorded session of the ad hoc committee, it was revealed that the medical executive committee’s attorney, David Meyer, and one of his associates, Joan Rehm, had written Dr. Michelotti’s opening and closing statements. According to plaintiff, he was unaware up until that point that the attorneys were representing both the ad hoc committee, as well as Dr. Michelotti, and he objected to the presence and participation of Mr. Meyer representing Dr. Michelotti in the ad hoc committee deliberations.

At the conclusion of their deliberations, the ad hoe committee recommended that plaintiff be advanced to associate attending, that his gastrointestinal endoscopy privileges be continued, and that he be required to obtain consultations on major surgery cases. The medical executive committee modified the ad hoc committee’s recommendations by terminating his gastrointestinal endoscopy privileges pending further training. After subsequent unsuccessful appeals by the plaintiff to the board of managers, the restrictions and limitations were to be implemented on February 27, 1989.

On March 29, 1989, plaintiff filed a complaint against the defendant for injunctive relief, and a temporary restraining order was entered that same day. On April 6, 1989, the temporary restraining order was extended to April 18, 1989, but then stricken and dissolved on April 17, 1989. On April 13, 1989, an amended complaint was filed, and on April 18, 1989, a temporary restraining order issued based upon the amended complaint. Plaintiff’s motion for a preliminary injunction was filed on April 4, 1989, and denied after a hearing on April 28, 1989. This interlocutory appeal, pursuant to Supreme Court Rule 307 (107 Ill. 2d R. 307), followed.

It has long been the rule in Illinois that a hospital’s decision to appoint, revoke, or limit a physician’s privileges is not subject to judicial review. (Mauer v. Highland Park Hospital Foundation (1967), 90 Ill. App. 2d 409, 412-13.) The rationale behind this rule is that hospitals and medical staffs should be free to exercise their professional judgments in the selection and retention of medical staff members. (Barrows v. Northwestern Memorial Hospital (1988), 123 Ill. 2d 49, 58.) The only exception to the rule of nonreview is that when a physician’s existing staff privileges are revoked or reduced, a private hospital must follow its own bylaws in doing so or be subject to limited judicial review. Rao v. St. Elizabeth’s Hospital of the Hospital Sisters of the Third Order of St. Francis (1986), 140 Ill. App. 3d 442, 456.

The plaintiff in this case is appealing from the denial of his request for a preliminary injunction. The purpose of a preliminary injunction is not to decide the controverted facts or merits of a case. A preliminary injunction is merely provisional in nature and concludes no rights, its office being merely to preserve the status quo until a final hearing on the merits. In order for a preliminary injunction to issue, the plaintiff must establish by a preponderance of the evidence that he possesses a right which needs protection, that irreparable injury will occur if the injunction is denied, that no remedy at law exists, and that the probability of success on the merits of the case exists. (Rao, 140 Ill. App. 3d at 456.) The decision to grant or deny a preliminary injunction rests in the sound discretion of the trial judge, and appellate court review is restricted to a determination of whether the trial court correctly exercised its broad discretionary powers. Rao, 140 Ill. App. 3d at 456.

Plaintiff contends, first, that the trial court’s findings of facts in support of the denial of preliminary injunctive relief were erroneous as a matter of law. Plaintiff complains as follows: (1) it was an abuse of discretion for the trial court to conclude that the “executive sessions” were “recesses” within the meaning of the bylaws; (2) that it was an abuse of discretion for the trial court to find that the final session of the ad hoc committee was not a hearing; (3) that plaintiff was deprived of his right to legal representation during parts of the ad hoc committee hearings; (4) that the presentation of evidence and testimony after the close of the hearing was a violation of the bylaws; and (5) the failure to keep an adequate record was a violation of the bylaws.

Except as to the first subpoint, plaintiff has not supported his argument with citation to authorities, in violation of Supreme Court Rule 341(e)(7) (113 Ill. 2d R. 341(e)(7)). Arguments which do not satisfy the requirements of Supreme Court Rule 341(e)(7) do not merit consideration on appeal. (People v. Trimble (1989), 181 Ill. App. 3d 355, 357; Rockford Memorial Hospital v. Schueler (1988), 167 Ill. App. 3d 358, 362.) Therefore, except for subpart (1), the remaining points are waived.

Plaintiff argues that the trial court’s finding that the “executive sessions” of the ad hoc committee were “recesses” within the meaning of the bylaws is erroneous and constitutes an abuse of discretion. Plaintiff maintains that since the attorneys for the defendant and the medical executive committee were present at these executive sessions and gave their opinions as to whether the defendant’s bylaws had been complied with, the ultimate question to be determined, the executive sessions were in fact part of the hearing. Therefore, the trial court erred in determining that the hearings were in recess during that time.

Defendant contends that plaintiff has waived any objection to the “executive sessions,” citing Rao v. St. Elizabeth’s Hospital of the Hospital Sisters of the Third Order of St. Francis (1986), 140 Ill. App. 3d 442. In that case, Dr. Rao agreed to proceed to an immediate hearing despite ample opportunity to have the hearing postponed until after he had reviewed the charts in question. He later alleged that the acts or omissions with which he was charged were not stated in concise language and that he did not receive a list of the specific or representative charts being questioned. The appellate court held that the trial court did not abuse its discretion in finding that Dr. Rao acquiesced in the decision of the ad hoe committee to proceed with the hearing as convened. The appellate court stated:

“Displeased with the review of his suspension, he [Dr. Rao] will not, after having assured the committee that to proceed was agreeable to him, be heard to say that he was prejudiced by the defendant’s failure to provide him in advance of the hearing with the charts being questioned of the defendant’s failure otherwise to abide by this provision of its bylaws.” 140 Ill. App. 3d at 458.

Plaintiff argues in response that before such a waiver can be found, there must be knowledge of the existence of the right and an intent to relinquish it. Lapidot v. Memorial Medical Center (1986), 144 Ill. App. 3d 141; Northern Trust Co. v. Oxford Speaker Co. (1982), 109 Ill. App. 3d 433.

Generally the defense of waiver applies when a party intentionally relinquishes a known right or his conduct warrants an inference of such relinquishment. (Northern Trust Co., 109 Ill. App. 3d at 438.) In this case, plaintiff was present at each session when the committee went into “executive session.” He never requested that he and/or his attorney be permitted to participate in any of the executive sessions. Moreover, the record does not support plaintiff’s argument that he and his attorney were somehow affirmatively prevented from attending these sessions. Neither plaintiff nor his attorney ever voiced an objection to the “executive sessions.” We note that at one point, plaintiff invited the committee to meet in “executive session” to discuss a suggestion he had made.

Plaintiff also argues that he cannot waive a right he did not know he possessed. The allegation plaintiff makes is that the “executive sessions” were in contradiction of the bylaws. Plaintiff does not allege that he was unaware of the provisions of the bylaws at the time of the ad hoc committee hearings or that he was somehow prevented from becoming familiar with their contents. Moreover, the record reflects that plaintiff had already been sent a summary of the procedures under the bylaws on July 21, 1987, months before the ad hoc committee hearings. A review of the summary of the procedure reveals it to be just that, a summary, and plaintiff cannot be heard to say he was misled by the content of that document. Clearly there was more than ample opportunity for plaintiff to familiarize himself with the bylaws and the procedures that governed his hearing before the ad hoc committee. Plaintiff cannot claim to be unaware of his rights under the bylaws simply by failing to avail himself of the opportunity to familiarize himself with that document.

We conclude, therefore, that plaintiff was aware or should have been aware of his rights under the bylaws and, by his conduct in failing to object to the “executive sessions,” waived any violation of the bylaws in that regard by the ad hoc committee. See Adkins v. Sarah Bush Lincoln Health Center (1987), 158 Ill. App. 3d 982, 987, aff’d (1989), 129 Ill. 2d 497.

Next, plaintiff contends that defendant’s ad hoc committee failed substantially to comply with the bylaws during its meetings. Again, plaintiff has failed to cite any authority to support his argument, and we hold that it is waived. Trimble, 181 Ill. App. 3d at 357; Rockford Memorial Hospital, 167 Ill. App. 3d at 362.

Next, plaintiff contends that he did not waive any objections to the defendant’s failure to abide by the provisions of its bylaws. Specifically, plaintiff argues that he could not knowingly waive his right to the presence of his attorney present and participating at the “executive sessions” because he did not know until the ninth or final recorded session of the hearings that attorney David Meyer was representing both Dr. Michelotti, the medical executive committee representative, and the ad hoc committee. At that time, plaintiff did object to Mr. Meyer’s presence and participation in this dual role.

The rule in Illinois is that words of corporate bylaws are to be interpreted in their ordinary popular sense. (Maimon v. Sisters of the Third Order of St. Francis (1983), 120 Ill. App. 3d 1090, 1096.) In Maimón, the appellate court reversed an order permanently enjoining the religious order from expelling Dr. Maimón from the staff of St. Anthony’s Hospital. The permanent injunction had been granted based in part upon a violation of the hospital bylaws which excluded participation on a hearing committee by any staff member who had “actively participated” in the formation of the charges against the individual sought to be discharged. The evidence showed that Dr. Zenisek, who was a member of the credentials committee that brought the charges against Dr. Maimón, was also a member of the ad hoc committee which reviewed the recommendation. The appellate court found that Dr. Zenisek’s dual role was not violative of the bylaws because he was a member ex officio of the credentials committee without a vote, and his participation in the hearings before the credentials committee was limited to procedural questions and answers. Thus, the appellate court found that Dr. Zenisek had not “actively participated” in the credentials committee hearings and was, therefore, not barred from membership on the ad hoc committee.

We are of the opinion that the same approach is called for here. The bylaws provide that neither party may be represented by legal counsel at any phase of the hearing unless both sides are represented. Plaintiff argues that the bylaws were violated when David Meyer, representing Dr. Michelotti, was present during the executive sessions, while plaintiff’s attorney was not.

Defendant argues that the record reflects that the attorney gave advice only in regard to procedural and technical matters. Plaintiff does not disagree with the characterization of the advice but argues that defendant is attempting to rewrite the bylaws to provide an exception for procedural matters to the rule that both sides must be represented.

Black’s Law Dictionary 676 (abridged 5th ed. 1983) defines “represent” as “to speak or act with authority on behalf of such a person.” There is no indication in the record that Mr. Meyer or any of thé attorneys from his office who participated in the executive sessions were acting as advocates during these “executive sessions,” and, thus, their participation at those meetings was not in violation of the bylaws (compare Maimon, 120 Ill. App. 3d at 1097). We are puzzled by plaintiff’s claims that he was misled by the fact that Mr. Meyer’s role as Dr. Michelotti’s attorney was not revealed to him at the very beginning. It appears that plaintiff assumed Mr. Meyer was representing the ad hoc committee. Yet, the fact that plaintiff was permitted to be represented by legal counsel should have indicated to plaintiff that Dr. Michelotti was also being represented. Since Mr. Meyer was the only other attorney participating (except, of course, plaintiff), plaintiff should have been alerted to the situation and made the appropriate inquiries at the commencement of these hearings. The fact that plaintiff, in addition to being a licensed physician, is also a licensed attorney at law makes his failure to inquire into the nature of Mr. Meyer’s participation in the hearings even more surprising.

Plaintiff also argues that since he was unaware that no record was being kept of the executive sessions, he cannot be said to have knowingly waived his right under the bylaws to have these sessions recorded by failing to object.

As we have previously stated, there is no evidence in the record that plaintiff was unfamiliar with the provisions of the bylaws or was somehow prevented by the defendant from learning of its provisions. We note that the hearings were transcribed by a court reporter. When the committee went into executive sessions, the court reporter, as well as the plaintiff and his attorney, left the room. Although, as plaintiff points out, the bylaws provide for several means of recording the hearings, we disagree with plaintiff’s conclusion that this does not support a finding that he knew the sessions were not being recorded. At the very least, the absence of the court reporter from the “executive sessions” should have prompted plaintiff to inquire as to whether the “executive session” was being recorded and by what means.

Plaintiff further argues that he was given no opportunity to object to the bylaw violations which occurred during the final, unrecorded deliberation session since he was not invited or aware of that meeting until the ad hoc committed had acted.

We have previously pointed out the record reflects that the role of the attorney for Dr. Michelotti and the committee was limited to advice on procedural matters. There is no indication that the attorney acted as an advocate in either the “executive sessions” or in the deliberation session. Since the plaintiff was entitled to have his fate determined in accordance with defendant’s bylaws, the fact that the attorney’s advice enabled the committee to render a decision in accordance with those bylaws was to plaintiff’s benefit. Further, although plaintiff complains that no record was kept of the deliberation session, the record reflects that the committee members took notes from which a written report was prepared. Since the bylaws provide for this method of recordkeeping, plaintiff’s complaint has no merit.

We conclude, therefore, that since the alleged violations of defendant’s bylaws did not occur, there is no merit to plaintiff’s argument.

Finally, plaintiff contends that it was an abuse of discretion on the part of the trial court to deny plaintiff’s request for a preliminary injunction.

Any private hospital action which does not violate its bylaws is beyond the scope of judicial review. (Knapp v. Palos Community Hospital (1984), 125 Ill. App. 3d 244, 259.) Since we have concluded that defendant’s bylaws were not violated or compliance with them was waived, plaintiff has not established the likelihood of success on the merits of his case. Thus, the trial court did not abuse its discretion in denying the petition for a preliminary injunction. Knapp, 125 Ill. App. 3d at 259.

Assuming, arguendo, that the violations of the bylaws alleged by plaintiff had occurred, the violations must be substantial to require judicial intervention. (Lapidot, 144 Ill. App. 3d at 148-49; Knapp, 125 Ill. App. 3d at 258-59.) A hospital’s determination to restrict or revoke staff privileges will only be remanded for compliance with the hospital’s bylaws if the plaintiff can show unfairness in the proceedings or that the violations prejudice the plaintiff. Rao, 140 Ill. App. 3d at 456.

The decision of the medical executive committee was to refuse to advance plaintiff to associate attending staff which in effect terminated plaintiff’s privileges at the hospital. The decision of the ad hoc committee was to permit plaintiff’s advancement under certain requirements. Plaintiff has failed to show that the proceedings were unfair or biased against him.

Accordingly, the judgment of the circuit court is affirmed.

Affirmed.

UNVERZAGT, P.J., and REINHARD, J., concur.