Apollo Real Estate Investment Fund v. Gelber

FIFTH DIVISION
December 31, 2009

No. 1-09-1538

APOLLO REAL ESTATE INVESTMENT )
FUND, IV, L.P., a Delaware Limited Partnership, )
)
Plaintiff-Appellees, )
) Appeal from the
v. ) Circuit Court of
) Cook County.
BRIAN GELBER, GELBER SECURITIES, LLC, )
an Illinois Limited Liability Company, ICE, LLC, an ) 07 L 5194
Illinois Limited Liability Company, GO, LLC, an )
Illinois Limited Liability Company, JOSEPH ) The Honorable
NICIFORO, ANNE M. NICIFORO, H. ROBERT ) Bill Taylor,
HOLMES, LAURENCE WOZNICKI, and GARY ) Judge Presiding.
SCHEIER, )
)
Defendants-Appellants. )

JUSTICE TOOMIN delivered the opinion of the court:

This matter is before us on interlocutory appeal pursuant to the provisions of Supreme

Court Rule 308 (155 Ill. 2d R. 308) to consider three questions certified by the trial court.

Plaintiff, Apollo Real Estate Investment Fund IV, L.P. (Apollo), was assigned an Ohio judgment

obtained by its assignor in 2004 against several corporate entities. In 2005, plaintiff brought an

action in the circuit court of Cook County against defendants to collect money it claims was

wrongfully transferred to them in 2001 by the judgment debtor corporation to avoid paying for

the underlying work performed for the debt. Following dismissal of the complaint, plaintiff

voluntarily dismissed the case. Then, in 2007, plaintiff refiled a new action, against these same

defendants, again seeking to recover money on the judgment. All counts were dismissed except a
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claim for unjust enrichment. Pursuant to the parties request, the circuit court then certified the

following questions for our review:

“1. Whether an assignment, which expressly distinguishes between claims and

judgments, confers standing on the assignee to enforce the monetary judgment by

asserting new claims unrelated to the judgment against parties not named in the underlying

litigation.

2. Whether, under the standard articulated by the Illinois Supreme Court in Porter

v. Decatur Memorial Hospital, 227 Ill. 2d 343 (Ill. 2008), a cause of action for unjust

enrichment relating to construction work performed in 2000 that is asserted for the first

time as part of a re-filed action, is sufficiently close in character and nature of injury to an

original case that focused upon a funds transfer that occurred in 2001 such that it can be

considered to ‘relate back’ for purposes of the statute of limitations.

3. Whether Apollo, Divine’s assignee, and therefore, a de facto creditor of the

debtor company, may maintain a cause of action for unjust enrichment against another co-

creditor of the same debtor company when the defendant co-debtor is alleged to have

received nothing more than the re-payment of a valid and enforceable pre-existing debt.”

For the following reasons, we answer all three certified questions in the affirmative.

BACKGROUND

In 1994, David Lasier founded TWS, Inc., a holding company, and Telecom Wireless

Solutions, Inc., an Atlanta-based telecommunications company. Under the umbrella of TWS,

Lasier also formed other affiliates and subsidiaries to acquire, develop, and operate wireless

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networks, which included: TWS International, Inc. (TWS International); OPM Auction Co.

(OPM); Blue Sky Communications, Inc.; Blue Sky Communications, L.L.C.; and Blue Sky

International. We will refer to these seven corporate entities collectively as the “TWS

Companies.”

On December 1, 1997, Gelber Securities, Inc., and Telecom Wireless Solutions, Inc.

(Telecom), executed a working capital line of credit agreement, pursuant to which Gelber

Securities agreed to establish a $2,400,000 line of credit for Telecom. The credit line was secured

by assets of Telecom but did not include assets of OPM. TWS, Inc., was not a party to this loan.

However, Gelber Securities was a shareholder of TWS. One of Gelber Securities’ principals was

Brian Gelber, who was a member of the board of directors of TWS.

On December 31, 1997, Gelber Securities assigned all of its rights and obligations under

the working capital line of credit agreement, including its right to repayment of any principal and

interest, to Ice, LLC. The members of Ice, LLC, included Go, LLC, whose members in turn

included Brian Gelber and his sons. Telecom subsequently drew almost the full balance of the

$2.4 million credit line.

In 1999, the TWS companies purchased licenses, at a cost of less than $4 million, to

operate wireless networks in West Virginia. OPM did not conduct any business operations,

except to hold any licenses. The TWS companies hired an outside company, Divine Tower

International Corporation (Divine), to design, develop, and construct the network. In May 1999,

Divine and the TWS companies executed a letter of intent providing that Divine was to fund,

develop, construct, and lease operating assets to the Blue Sky Companies in specific geographic

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regions in West Virginia. OPM was awarded the West Virginia licenses, and subsequently the

TWS Companies provided Divine with the authority to negotiate with the area

telecommunications carriers. TWS International identified each area where it wanted Divine to

place the TWS antennas by issuing geographical radiuses where wireless towers were to be

located, called search area rings (SARs). The TWS companies gave Divine written approval of

129 primary sites. According to Apollo, the TWS companies and Divine orally agreed that Divine

would receive a specific amount for its work on each SAR.

However, on July 21, 2000, the TWS Companies informed Divine that they were ceasing

all operations relating to the West Virginia network, and instructed Divine to stop all work. On

September 13, 2000, OPM submitted an invoice to Blue Sky Communications for $2,978,500 for

the work performed by Divine in designing and engineering the West Virginia network, with 1.5%

monthly interest after 30 days. On November 20, 2000, the maturity date of the working capital

line of credit agreement, Telecom owed Ice, LLC, as Gelber Securities’ assignee, $2.378 million

in principal and accrued interest. Telecom and Ice, LLC, subsequently agreed to extend the

maturity date to July 31, 2001. On June 29, 2001, OPM sold the West Virginia licenses to Key

Communications, Inc., for approximately $14 million. OPM sent the majority of the proceeds of

the sale to TWS, and wired $2,385,240 to Ice, LLC, in full repayment of the loan. Shortly

thereafter, OPM dissolved. Neither OPM nor any of the other TWS companies paid Divine.

In 2002, Divine filed suit against the TWS companies in the United States District Court

for the Southern District of Ohio, Eastern Division, captioned DTIC International Corp. v. Blue

Sky Communications, Inc., et al., Case No. 2:02-CV-00905. On April 13, 2004, the district court

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granted Divine’s uncontested summary judgment motion and entered judgment in favor of Divine

and against all the TWS Companies in the amount of $4,968,351, plus prejudgment interest in the

amount of $1,763,019, for a total judgment of $6,641,376.

The TWS companies did not pay Divine on the judgment, and Divine subsequently filed a

chapter 11 bankruptcy petition. 11 U.S.C. 1101 et seq. (2006). Apollo was one of Divine’s

secured creditors. On December 12, 2004, the bankruptcy court approved Divine’s plan of

liquidation. As of that date, Apollo had a deficiency claim for its prepetition secured claim against

Divine for loans in the amount of $20,646,438.60. Under the plan of liquidation, Apollo was

assigned Divine’s judgment against the TWS companies.

On June 23, 2005, Apollo filed an action in the circuit court of Cook County against the

Gelber defendants and others, captioned Apollo Real Estate Investment Fund IV, L.P. v. Brian

Gelber, et al., Case No. 05 L 6954. Counts I and II stated claims against all defendants under the

Illinois Uniform Fraudulent Transfer Act (740 ILCS 160/1 et seq. (West 2006)), and count III

was a claim for breach of fiduciary duty against Brian Gelber. All three counts were based on the

June 29, 2001, transfer of $2,385,240 to Ice, LLC, in repayment of the working capital line of

credit, allegedly caused fraudulently by the Gelber defendants. The Gelber defendants’ motion to

dismiss was granted. On February 21, 2006, Apollo filed its first amended complaint, also setting

forth claims for violations of the Illinois Uniform Fraudulent Transfer Act and breach of fiduciary

duty. In its May 5, 2006, order, the circuit court granted the Gelber defendants’ motion to

dismiss Apollo’s first amended complaint for failure to state a claim pursuant to section 2-615 of

the Illinois Code of Civil Procedure (735 ILCS 5/2-615 (West 2004)). The court further provided

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in its dismissal order that Apollo had 28 days to amend its complaint. Apollo did not amend its

complaint within the 28 days, nor did it appeal the dismissal. Nonetheless, on June 29, 2006,

Apollo voluntarily dismissed its case without prejudice.

On May 17, 2007, Apollo filed the instant action in the circuit court of Cook County,

again asserting claims for violations of the Illinois Uniform Fraudulent Transfer Act and breach of

fiduciary duty, and adding an additional claim for unjust enrichment. The circuit court dismissed

the complaint on October 24, 2007. In turn, Apollo then filed a first amended complaint alleging

the same four counts. On February 7, 2008, the trial court dismissed counts I, II and III for

failure to state a cause of action, but allowed the unjust enrichment claim to stand. This claim

alleged that the Gelber defendants were unjustly enriched by the work Divine performed which

increased the value of the West Virgina network licenses. As the assignee of the Divine

judgment, Apollo alleged that it was now entitled to this payment.

The Gelber defendants filed additional motions to dismiss the unjust enrichment claim,

alleging, inter alia: (1) Apollo lacked standing as assignee of Divine’s judgment to assert

Divine’s claims for unjust enrichment against the Gelber defendants; and (2) the unjust enrichment

claim for work performed in 1999 and 2000 was time-barred by the five-year statute of limitations

and did not relate back to the 2005 case. On May 22, 2008, the circuit court denied the Gelber

defendants’ motion to dismiss the unjust enrichment claim. The Gelber defendants subsequently

filed a motion for summary judgment, arguing that they could not be sued by Apollo because

Apollo was a co-creditor of TWS, and also that there was no unjust enrichment because the

payment to Ice, LLC, was for a valid preexisting debt. On February 26, 2009, the circuit court

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denied the Gelber defendants’ motion for summary judgment.

Following the denial of the motion for summary judgment, the parties jointly presented the

three questions for certification by the trial court. On June 2, 2009, the trial court certified the

questions for interlocutory appeal after determining that its prior orders involved questions of law

as to which substantial grounds for difference of opinion exist and that an immediate appeal could

materially advance the ultimate termination of litigation. In turn, the Gelber defendants filed a

petition for leave to appeal pursuant to Illinois Supreme Court Rule 308 (155 Ill. 2d R. 308)

which we granted on July 13, 2009.

ANALYSIS

Supreme Court Rule 308 provides a remedy of permissive appeal for interlocutory orders

where the trial court has deemed that they involve a question of law as to which there is

substantial ground for difference of opinion and where an immediate appeal from the order may

materially advance the ultimate termination of the litigation. 155 Ill. 2d R. 308. We apply a de

novo standard of review to legal questions presented in an interlocutory appeal brought pursuant

to Supreme Court Rule 308(a). Anthony v. City of Chicago, 382 Ill. App. 3d 983, 987, 888

N.E.2d 721, 725 (2008). Our review is strictly limited to the certified questions presented; we do

not render any opinion on the propriety of any underlying rulings of the trial court. Anthony, 382

Ill. App. 3d at 987, 888 N.E.2d at 725.

I. Standing to Bring New Claims Against the Gelber Defendants

The first certified question is: “Whether an assignment, which expressly distinguishes

between claims and judgments, confers standing on the assignee to enforce the monetary

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judgment by asserting new claims unrelated to the judgment against parties not named in the

underlying litigation.” Apollo maintains that the surrounding circumstances indicate that the

parties intended for Divine to receive an assignment of both the judgment and claims. Conversely,

the Gelber defendants contend that Apollo does not have standing to enforce the Divine judgment

against them because the assignment expressly distinguished between the Divine judgment and

other claims, and because the Gelber defendants were neither parties to the underlying case nor

named in the judgment.

Although Apollo maintains that the assignment contemplated that Apollo would have the

right to assert new claims against other parties to satisfy the judgment, we disagree. As the

Gelber defendants assert, Apollo’s authorities on this point offer no support for that proposition

and in fact are inapposite, as both cases involved the threshold determination of whether an

assignment in fact even occurred. See Rivan Die Mold Corp. v. Stewart-Warner Corp., 26 Ill.

App. 3d 637, 325 N.E.2d 357 (1975); Northwest Diversified, Inc. v. Desai, 353 Ill. App. 3d 378,

818 N.E.2d 753 (2004).

Apollo also maintains that Illinois courts have interpreted assignments more broadly and

cites as an example the assignment of promissory notes, which carries with it the assignment of

mortgages secured by the note. See Federal National Mortgage Ass’n v. Kuipers, 314 Ill. App.

3d 631, 635, 732 N.E.2d 723, 727 (2000). However, an assignment of a mortgage or promissory

note is readily distinguishable from the assignment of a judgment for money damages, typified in

the proceedings below.

The Gelber defendants submit that Apollo cannot proceed on any claims because the

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assignment itself distinguished between judgments and claims, providing for assignment to Apollo

of certain other claims against unrelated parties in New York and California. However, we find it

unnecessary to make such a distinction here. We need only look to the language of the

assignment that was approved by the bankruptcy court as part of Divine’s plan for liquidation,

which specifically delineated the scope of the assignment:

“Judgment obtained by creditor in litigation pending in the United States District Court,

Southern District, of Ohio, styled Divine Tower International Corporation v. Blue Sky

Communications, Inc., et. al., Case No. 2:02-CV00905, in the original amount of

$6,641,370.”

It is clear from the express language of the district court’s order that the assignment was

only of the judgment for money damages in the Divine action. It is well settled that an assignment

transfers to the assignee all the right, title or interest of the assignor in the thing assigned; thus, the

assignee stands in the shoes of the assignor. Brandon Apparel Group v. Kirkland & Ellis, 382 Ill.

App. 3d 273, 284, 887 N.E.2d 748, 756 (2008); PRA III, LLC v. Hund, 364 Ill. App. 3d 378,

382, 846 N.E.2d 965, 968 (2006). The assignee can obtain no greater right or interest than that

possessed by the assignor. Owens v. McDermott, Will & Emery, 316 Ill. App. 3d 340, 350, 736

N.E.2d 145, 155 (2000). Thus, Apollo as assignee stands in the shoes of its assignor and cannot

go beyond what it was assigned; namely, the judgment. Here, a judgment for money damages

was assigned; nothing more, nothing less.

A “judgment” is the final determination of a court upon matters submitted to it in an

action or proceeding; a judgment is the judicial act of the court. Tri-G, Inc. v. Burke, Bosselman

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& Weaver, 222 Ill. 2d 218, 256, 856 N.E.2d 389, 411 (2006). “Judgment” has a well settled

definition as legal term: it is a court's official decision with respect to the rights and obligations of

parties to a lawsuit. People ex rel. Department of Public Aid v. Smith, 212 Ill. 2d 389, 398, 818

N.E.2d 1204, 1209 (2004). “Under the doctrine of full faith and credit, the forum court will not

rehear a case on its merits because the judgment is res judicata.” Firstar Bank Milwaukee, NA v.

Cole, 287 Ill. App. 3d 381, 383, 678 N.E.2d 668, 670 (1997), quoting All Seasons Industries,

Inc. v. Gregory, 174 Ill. App. 3d 700, 703, 529 N.E.2d 25, 26 (1988). Moreover, the principles

of res judicata dictate that “the nature and amount of the judgment, together with all defenses

that could have been raised in the original court, are foreclosed.” Firstar Bank Milwaukee, NA,

287 Ill. App. 3d at 383, 678 N.E.2d at 670, citing Falcon v. Faulkner, 209 Ill. App. 3d 1, 13, 567

N.E.2d 686, 694 (1991), and Dawson v. Duncan, 144 Ill. App. 3d 532, 537, 494 N.E.2d 900, 903

(1986). Thus, the obligation and liability to pay on the Divine judgment based on the cause of

action alleged in the Divine case has already been adjudicated and cannot be relitigated. Any new

claims related to liability cannot be raised.

However, although Apollo is bound by the judgment it acquired, it is not prohibited from

seeking to enforce it. See SDS Partners, Inc. v. Cramer, 305 Ill. App. 3d 893, 897, 713 N.E.2d

239, 241 (1999). The enforcement of judgments rendered by courts outside the State of Illinois is

governed under two uniform statutes: the Uniform Foreign Money-Judgments Recognition Act

(Recognition Act) (735 ILCS 5/12-618 et seq. (West 2002)), and the Uniform Enforcement of

Foreign Judgments Act (Enforcement Act) (735 ILCS 5/12-650 et seq. (West 2002)). The

Recognition Act recognizes judgments of a foreign state, which is any governmental unit other

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than the United States, or any state (735 ILCS 5/12-618(a) (2002)), and provides that as long as a

foreign judgment is final and conclusive and enforceable where rendered, it is enforceable in the

same manner as the judgment of a sister state which is entitled to full faith and credit (735 ILCS

5/12-619, 12-620 (West 2002)). The Enforcement Act governs enforcement of foreign

judgments of a court of the United States or of any other court that is entitled to full faith and

credit in Illinois (735 ILCS 5/12-651 (West 2002)). However, the statute provides that “[t]he

right of a judgment creditor to bring an action to enforce his judgment instead of proceeding

under this Act remains unimpaired.” 735 ILCS 5/12-656 (West 2002). See PRA III, LLC, 364

Ill. App. 3d at 382, 846 N.E.2d at 968.

Here, Apollo chose to bring an action to enforce the Divine judgment instead of

proceeding under the Enforcement Act. As a general rule, in Illinois, a judgment for a sum certain

in money is “a good cause of action” that evidences an indebtedness upon which a new action for

debt may lie. Green v. Alton Telegraph Printing Co., 107 Ill. App. 3d 755, 763, 438 N.E.2d 203,

208 (1982). "No rule of law is better settled than the one; that an action of debt is maintainable

on a judgment of a court of record." Greathouse v. Smith, 4 Ill. 541 at 541 (1842).

This certified question further asks whether such an action to collect on an indebtedness

evidenced by a judgment can be brought against parties not named in the underlying litigation. It

is axiomatic that the answer must be yes; otherwise defendants would be allowed to fraudulently

transfer funds to third parties to avoid paying judgments. Such causes of action may be statutory,

as, for example, actions brought under the Uniform Fraudulent Transfer Act (740 ILCS 160/1 et

seq. (West 2006)), or under common law and equity, such as actions for unjust enrichment, which

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are precisely two of the claims Apollo brought in the instant case.1 Thus, we answer the first

certified question in the affirmative.

II. Relation Back of Unjust Enrichment Claim

The second certified question is: “Whether, under the standard articulated by the Illinois

Supreme Court in Porter v. Decatur Memorial Hospital, 227 Ill. 2d 343 (Ill. 2008), a cause of

action for unjust enrichment relating to construction work performed in 2000 that is asserted for

the first time as part of a re-filed action, is sufficiently close in character and nature of injury to an

original case that focused upon a funds transfer that occurred in 2001 such that it can be

considered to ‘relate back’ for purposes of the statute of limitations.” Apollo maintains that the

unjust enrichment claim arises out of the same June 29, 2001, transfer that was the basis of its

original complaint. The Gelber defendants submit that the time gap, the nature of the claims, and

the injuries involved are totally separate such that the 2007 complaint does not relate back to the

2005 complaint.

Initially we note that some confusion regarding the date of accrual of claim may arise

because the certified question refers to the claim as based on the construction work performed in

2000. However, it is clear that, as against the Gelber defendants, the first amended complaint

alleges unjust enrichment based on the transfer of funds from Gelber Securities to Ice, LLC, on

June 29, 2001. The allegations regarding nonpayment for the work performed by Divine on the

network are only against the TWS Companies. The date of the occurrence for the claim asserted

1
We analyze the propriety of bringing an unjust enrichment action against third parties,
and against the Gelber defendants specifically, in answer to the third certified question.

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against the Gelber defendants is thus June 29, 2001, for purposes of calculating time period

allowed under the statute of limitations. A cause of action for unjust enrichment is governed by

Illinois’s five-year statute of limitations. 735 ILCS 5/13-205 (West 2006). The statute of

limitations expired on June 29, 2006. Apollo’s original complaint was filed on June 23, 2005,

well within the limitations period. Apollo first brought its cause of action for unjust enrichment in

its refiled action pursuant to section 13-217 of the Illinois Code of Civil Procedure (Code) (725

ILCS 5/13-217 (West 2006)) on May 17, 2007. That initial complaint was dismissed, and Apollo

filed an amended complaint, again alleging the unjust enrichment claim which was initially brought

in the refiled action.

We are asked to determine whether the claim for unjust enrichment in the refiled action

relates back to the 2005 case pursuant to section 2-616 of the Code under the test enunciated by

our supreme court in Porter v. Decatur Memorial Hospital, 227 Ill. 2d 343, 882 N.E.2d 583

(2008): “[T]he key inquiry is whether the cause of action asserted in the newly filed pleading

‘grew out of the same transaction or occurrence’ set up in the pleadings that were filed within the

limitations period.” Porter, 227 Ill. 2d at 346, 882 N.E.2d at 584, quoting 735 ILCS 5/2-616(b)

(West 2004).

However, we determine that section 2-616 does not apply, and therefore, a relation-back

analysis under Porter would be inappropriate. In Bryson v. New America Publications, Inc., 174

Ill. 2d 77, 106-07, 672 N.E.2d 1207, 1223 (1996), cited by the Gelber defendants, our supreme

court held an amended pleading in a refiled action related back to the original pleading under

section 2-616. In Bryson, the original action in federal court had been dismissed for lack of

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diversity jurisdiction, and the court examined the new claims in the refiled case under section 2-

616. Bryson, 174 Ill. 2d at 105, 672 N.E.2d at 1222.

However, Bryson is distinguishable from the case at bar. The new claims in Bryson were

raised in an amended pleading, which was filed after the extended limitations period for the refiled

action under section 13-217 had expired. Here, on the other hand, the new claim for unjust

enrichment was brought in the initial pleading in this refiled action, which was filed within the

extended one-year period under section 13-217.

Section 2-616 governs amendments and not refiled actions. See Berkey v. Treasure

Island Farmers Market, Inc., 172 Ill. App. 3d 67, 69, 526 N.E.2d 644, 645 (1988). Section 2-

616 “is titled ‘Amendments’ and is concerned only with amendments and when they should be

permitted." Berkey, 172 Ill. App. 3d at 69, 526 N.E.2d at 645.

The unjust enrichment claim brought here in the refiled action is not an amendment of the

earlier 2005 action. An action that is refiled pursuant to section 13-217 is a new action, not a

reinstatement of the old action. Dubina v. Mesirow Realty Development, Inc., 178 Ill. 2d 496,

504, 687 N.E.2d 871, 875 (1997). The 2007 case before us therefore is a new lawsuit and not an

amended pleading under section 2-616(b) of the Code (735 ILCS 5/2-616(b) (West 2006)). The

unjust enrichment claim also cannot be construed as a new claim in an amendment to the 2007

action, as it was first brought in that refiled action. Therefore, we determine that, as the unjust

enrichment claim was not brought in an amended pleading, section 2-616 does not apply.

Refilings are governed by section 13-217 of the Code (735 ILCS 5/13-217 (West 2006)), and not

section 2-616 (735 ILCS 5/2-616 (West 2006)).

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Nonetheless, we must analyze the question as to whether under section 13-217, the

refiling was timely. The enactment provides that following certain dispositions a plaintiff “may

commence a new action within one year or within the remaining period of limitation, whichever is

greater.” 735 ILCS 5/13-217 (West 2006). Section 13-217 is a limitations saving statute,

enacted for the purpose of facilitating the disposition of litigation on the merits and avoiding its

frustration upon grounds unrelated to the merits. 735 ILCS 5/13-217 (West 2006); Case v.

Galesburg Cottage Hospital, 227 Ill. 2d 207, 215, 880 N.E.2d 171, 176 (2007). The provision

allows a party to refile when the original action was disposed of on the following grounds:

“if judgment is entered for the plaintiff but reversed on appeal, or if there is a

verdict in favor of the plaintiff and, upon a motion in arrest of judgment, the judgment is

entered against the plaintiff, or the action is voluntarily dismissed by the plaintiff, or the

action is dismissed for want of prosecution, or the action is dismissed by a United States

District Court for lack of jurisdiction, or the action is dismissed by a United States District

Court for improper venue, then, whether or not the time limitation for bringing such action

expires during the pendency of such action, the plaintiff, his or her heirs, executors or

administrators may commence a new action within one year or within the remaining period

of limitation, whichever is greater.” 735 ILCS 5/13-217 (West 1994).

The resolution of this question is somewhat complicated due to the procedural history of

the case sub judice. Here Apollo voluntarily dismissed its case after the court on May 5, 2006,

had already entered an involuntary dismissal for failure to state a claim pursuant to section 2-615.

However, the circuit court’s order stated it was without prejudice and provided Apollo had 28

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days to amend its complaint. Apollo did not amend its complaint within the 28 days, nor did it file

any other motion or pleading within that time. Apollo also did not appeal the dismissal. On June

29, 2006, well over a month after the expiration of the 28 days, Apollo had an order entered

voluntarily dismissing the case stating it also was without prejudice.

We note that there is some tension in Illinois law regarding the nature of involuntary

dismissal orders granted leave to amend a complaint. There is a great weight of authority holding

that an order dismissing a complaint is not final until the trial court enters an order dismissing the

suit, and does so with prejudice. See Wick Building Systems, Inc. v. Bunning, 107 Ill. App. 3d

61, 62-63, 437 N.E.2d 341, 342 (1982) (though acknowledging that the argument that a dismissal

order with leave to amend is final if a plaintiff does not amend was "appealing," court held that the

"better" rule to apply was that an order is not final until a subsequent order dismissing the suit is

entered); Jackson v. Victory Memorial Hospital, 387 Ill. App. 3d 342, 352, 900 N.E.2d 309, 318

(2008) (an order dismissing a complaint is not final until the trial court enters an order dismissing

the suit and does so with prejudice); Piagentini v. Ford Motor Co., 387 Ill. App. 3d 887, 895,

901 N.E.2d 986, 994 (2009) (an order dismissing a complaint but granting leave to replead is not

final until the trial court enters an order dismissing the suit with prejudice).

Moreover, a long-standing line of precedent instructs that where the time allowed for

amendment of a complaint after dismissal expires without such amendment, the trial court retains

jurisdiction over the case, thus preventing the operation of the dismissal order as a final judgment.

See Martin v. Marks, 80 Ill. App. 3d 915, 918, 400 N.E.2d 711, 713 (1980) (order of dismissal

was not final and appealable since it granted plaintiff leave to file an amended complaint within 30

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days, and since no final order was entered by the trial court, it retained jurisdiction although the

30 days allowed to amend had expired); Richardson v. Economy Fire & Casualty Co., 126 Ill.

App. 3d 520, 524, 467 N.E.2d 317, 320 (1984) (where time within which to amend dismissed

complaint has expired without such amendment, the trial court nevertheless retains jurisdiction),

rev'd on other grounds, 109 Ill. 2d 41, 485 N.E.2d 327 (1985). However, there is, to be sure,

authority which holds to the contrary. See, e.g., Director of Insurance ex rel. State v. A&A

Midwest Rebuilders, Inc., 383 Ill. App. 3d 721, 891 N.E.2d 500 (2008) (order of dismissal may

be final even though it is not with prejudice unless there is a request to amend, and all dismissals,

whether with or without prejudice, become final and unalterable judgments under Illinois law after

30 days unless a party takes some action), and cases cited therein.

Further, our supreme court’s decision in Smith v. Central Illinois Regional Airport, 207

Ill. 2d 578, 802 N.E.2d 250 (2003), lends support to the contention that when a period for leave

to amend given in dismissal orders expires without such amendment, the involuntary dismissal

should be considered a final adjudication on the merits, which then would not be within the

purview of section 13-217. In Smith, the dismissal order was without prejudice and the plaintiff

was granted 60 days’ leave to amend the complaint. The plaintiff did not amend, and instead filed

the voluntary dismissal before the expiration of the time allowed to amend. Smith, 207 Ill. 2d at

588-89, 802 N.E.2d at 256. The supreme court held that the trial court should have allowed the

plaintiff’s involuntary dismissal because it was within the period given for leave to amend. In

analyzing the nature and effect of the dismissal order, and subsequent action, the court stated that

“the granting of defendants' section 2-615 motion would be considered to be with prejudice only

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after the expiration of the 60-day period.” Smith, 207 Ill. 2d at 588-89, 802 N.E.2d at 256-57.

One might conclude from this language that, conversely, in situations manifested by the facts at

bar where parties file a voluntary dismissal after the expiration of the leave to amend period, the

dismissal order would be considered with prejudice and a final adjudication. However, the

supreme court did not reach the precise issue presented here. Further, it has not overruled the

prior Illinois cases holding that dismissal orders granting leave to replead are not final until the

trial court enters an order dismissing the suit with prejudice, and where the time to amend expires

the trial court still retains jurisdiction.

We recently held that whether a dismissal for failure to state a claim with leave to amend is

a final judgment and adjudication upon the merits depends on the entire context of the dismissal

order. Kiefer v. Rust-oleum Corp., No. 1-08-2879, slip op. at 19 (Aug. 24, 2009). In Kiefer, at

the hearing on the motion to dismiss the court expressly found that the plaintiff could not plead

any set of facts that would allow him to recover on his strict product liability claims. Kiefer, slip

op. at 20. Thus, the substance of the order showed it was a final adjudication upon the merits of

those claims. Kiefer, slip op. at 20. The involuntarily dismissal therefore became a final judgment

after there was no appeal, and a subsequent voluntary dismissal barred any claims on the same set

of operative facts in the second action, based on res judicata. Kiefer, slip op. at 19.

Under the recent guiding authority of Kiefer, it appears that the dismissal of the 2005

action was not intended to be a final adjudication on the merits, as the court merely stated that

“the First Amended Complaint needs more factual specificity,” and then gave Apollo 28 days to

amend. Unlike Kiefer, the court here allowed Apollo the opportunity to plead facts that would

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allow it to recover on its claims. Thus, we cannot say with clarity that the involuntary dismissal

with leave to amend operated as a final judgment and adjudication upon the merits such that

section 13-217 would not apply.

Instead, we deem the voluntary dismissal to be the effective order disposing of the 2005

action. Here Apollo voluntarily dismissed its case after the court in its May 5, 2006, order had

already entered the order dismissing the complaint. The circuit court’s dismissal order stated it

was without prejudice and provided Apollo had 28 days to amend its complaint. Although Apollo

did not amend its complaint within the 28 days or file any other motion or pleading within that

time, Apollo did file a voluntary dismissal without prejudice on June 29, 2006, and the court had

not yet entered a final judgment order disposing of the action. Thus, we determine that under the

weight of current precedent the involuntary dismissal was not a final judgment, and the later-filed

voluntary dismissal was effective.

As such, our analysis is indeed governed by section 13-217, which specifically includes

voluntary dismissals (735 ILCS 5/13-217 (West 2006)), and we conclude that this refiled action

was timely filed and the unjust enrichment claim was timely raised within one year after the

voluntary dismissal. We further note our supreme court’s pronouncement in Bryson that “[b]oth

section 13-217 and section 2-616(b) are remedial in nature and should be liberally construed in

favor of hearing the plaintiff's claim.” Bryson, 174 Ill. 2d at 106, 672 N.E.2d at 1223. Therefore,

we answer the second certified question in the affirmative.

III. Unjust Enrichment Claim Against Co-Creditor Defendants

The third certified question is: “Whether Apollo, Divine’s assignee, and therefore, a de

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facto creditor of the debtor company, may maintain a cause of action for unjust enrichment

against another co-creditor of the same debtor company when the defendant co-debtor is alleged

to have received nothing more than the re-payment of a valid and enforceable pre-existing debt.”

Apollo argues that it could assert the unjust enrichment claim against the Gelber defendants

because the loan was not repaid by the original debtor. The Gelber defendants maintain that

Apollo cannot maintain an unjust enrichment cause of action against a co-creditor.

Whereas we determined in answer to the first certified question that Apollo generally has

standing to bring a claim against the Gelber defendants to enforce the debt evidenced by the

Divine judgment it was assigned, the question here is whether Apollo has standing to bring an

action for unjust enrichment against the Gelber defendants for the debt evidenced by the assigned

judgment. We recognize that, generally, an action on a judgment can only be brought against the

defendant of record in the judgment or his successor in interest, not against an entity or person

not named in judgment. See Peterson v. Superior Bank FSB, 242 Ill. App. 3d 1090, 611 N.E.2d

1139 (1993) (judgment creditor could not enforce judgment against undisclosed principal where

previously entered judgment was entered against alleged agent). See also Sunseri v. Moen, 382

Ill. App. 3d 821, 832-33, 888 N.E.2d 713 (2008) (affidavit to register a foreign judgment against

an insolvent partnership could not be amended to name a general partner as a judgment debtor

because the foreign judgment had been entered against the partnership only).

The Divine judgment was entered against the TWS corporate entities, and we

acknowledge that the Gelber defendants collectively are comprised of wholly separate corporate

entities and individuals. It is of course well settled that a corporation is a legal entity that exists

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separately and distinctly from its shareholders, officers, and directors, who generally are not liable

for the corporation's debts. Peetoom v. Swanson, 334 Ill. App. 3d 523, 526, 778 N.E.2d 291, 294

(2002). One of the primary purposes of doing business as a corporation is to insulate

stockholders from unlimited liability for corporate activity. Peetoom, 334 Ill. App. 3d at 526, 778

N.E.2d at 294. Limited liability will ordinarily exist even though the corporation is closely held or

has a single shareholder. Peetoom, 334 Ill. App. 3d at 526, 778 N.E.2d at 294. However, a

judgment creditor may initiate an action to pierce the corporate veil to enforce a judgment against

a corporation's shareholders. Peetoom, 334 Ill. App. 3d at 527, 778 N.E.2d at 294-95.

Moreover, the doctrine of unjust enrichment underlies a number of legal and equitable

actions and remedies. HPI Health Care Services, Inc. v. Mt. Vernon Hospital, Inc., 131 Ill. 2d

145, 160, 545 N.E.2d 672, 679 (1989). To state a cause of action based on a theory of unjust

enrichment, a plaintiff must allege that the defendant has unjustly retained a benefit to the

plaintiff's detriment, and that defendant's retention of the benefit violates the fundamental

principles of justice, equity, and good conscience. HPI Health Care Services, Inc., 131 Ill. 2d at

160, 545 N.E.2d at 679. In HPI Health Care Services, Inc., the Illinois supreme court recognized

that “[m]any unjust-enrichment cases involve ‘situations in which the benefit the plaintiff is

seeking to recover proceeded directly from him to the defendant.’ [Citations.]” However, a

plaintiff may pursue a cause of action for unjust enrichment where the benefit was transferred to

the defendant by a third party where (1) the benefit should have been given to the plaintiff, but the

third party mistakenly gave it to the defendant instead; (2) the defendant procured the benefit

from the third party through some type of wrongful conduct; or (3) the plaintiff for some other

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reason had a better claim to the benefit than the defendant. HPI Health Care Services, Inc., 131

Ill. 2d at 161-62, 545 N.E.2d at 679.

In HPI Health Care Services, Inc., similar to the case at bar the plaintiff also sought

recovery of a benefit that was transferred to the defendant by another party. In HPI Health Care

Services, Inc., the plaintiff pharmaceutical company brought a claim for unjust enrichment against

Centerre, for rental payments it received from Mt. Vernon Hospital, a third party, while HPI’s

pharmaceutical goods and services remained unpaid by the hospital. HPI's claim was based on

allegations that Centerre, “requested” the appointment of a member to the hospital’s board of

trustees, and who maintained that rental payments be made to Centerre, rather than HPI. HPI

Health Care Services, Inc., 131 Ill. 2d at 160-61, 545 N.E.2d at 679. However, our supreme

court held that the allegation that Centerre “requested” the appointment member of the board of

trustees was insufficient to establish that he was Centerre’s agent, and thus failed to sufficiently

allege that Centerre’s conduct was wrongful. HPI Health Care Services, Inc., 131 Ill. 2d at 164,

545 N.E.2d at 680. Thus, HPI failed to state a cause of action for unjust enrichment. The

supreme court also held that HPI’s complaint was insufficient in that it failed to allege that

Centerre’s conduct in procuring payments from Mt. Vernon was wrongful, or that HPI's right to

receive payments from Mt. Vernon was superior to the claim of Centerre. HPI Health Care

Services, Inc., 131 Ill. 2d at 162, 545 N.E.2d at 679.

Nonetheless, in applying HPI Health Care Services, Inc., a different result obtains because

Apollo alleges it should have rightfully received funds that were fraudulently transferred to the

Gelber defendants. As distinguished from the plaintiff in HPI Health Care Services, Inc., Apollo

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further alleged that the Gelber defendants were insiders of the third party corporation that owed

payment to Divine, and that the transfer of funds to defendants did not constitute the mere

repayment of a loan. Thus, Apollo has sufficiently stated a cause of action for unjust enrichment.

Therefore, we answer the third certified question in the affirmative.

CONCLUSION

For all of the foregoing reasons, we answer all three certified questions in the affirmative.

Certified questions answered; cause remanded.

TULLY and FITZGERALD SMITH, JJ., concur.

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