Supplemental Opinion on Denial of Rehearing
JUSTICE LINDBERGdelivered the the opinion of the court:
On August 16, 1982, McDonald’s filed a petition for rehearing in the instant case. McDonald’s argues that this court erred in its disposition of counts III and IV for four reasons. First, McDonald’s contends that our decision marks the first time in the history of this State that an Illinois resident has been denied the right to file an action in Illinois alleging a violation of his rights under Illinois law due solely to a procedural rule of a foreign jurisdiction. Specifically, McDonald’s argues that a decision which binds an Illinois resident to the compulsory counterclaim provisions of the Federal Rules of Civil Procedure, violates the long-standing Illinois policy that a party is not obligated to file a compulsory counterclaim.
At the outset we note that McDonald’s raised this point for the first time on appeal and therefore we were not then and are not now required to address this argument. (Kravis v. Smith Marine, Inc. (1975), 60 Ill. 2d 141; First National Bank & Trust Co. v. City of Rockford (1977), 47 Ill. App. 3d 131, 361 N.E.2d 832.) However, we choose to discuss this issue. The compulsory counterclaim rule is applicable even though State law has no such requirement. (G&M Tire Co. v. Dunlop Tire & Rubber Corp. (N.D. Miss. 1964), 36 F.R.D. 440; Note, The Erie Doctrine and Federal Rule 13(a), 46 Minn. L. Rev. 913 (1962); cf. Sinkbeil v. Handler (D. Neb. 1946), 7 F.R.D. 92; O’Donnell v. Archie’s Motor Express (E.D. Pa. 1959), 176 F. Supp. 36.) Indeed, a counterclaim is compulsory under the Federal rules even though under relevant State law the party would lack capacity to bring on independent action on the claim. Tolson v. Hodge (4th Cir. 1969), 411 F.2d 123; Avondale Shipyards, Inc. v. Propulsion Systems, Inc. (E.D. La. 1971), 53 F.R.D. 341.
A more difficult question is whether the States must refuse to hear a suit that would be barred in Federal court for failure to have pleaded it as a compulsory counterclaim. It has been held that a Federal court may not enjoin prosecution in a State court of what should have been a compulsory counterclaim in a pending Federal action, but this is because of the general reluctance of Federal courts to enjoin State actions. These cases do not suggest that the States are free to disregard the failure of the pleader to put forward his Federal counterclaim. C. Wright, Law of Federal Courts sec. 79, at 391 (3d ed. 1976).
If Federal Rule 13(a) is a mere rule of procedure, then, on well-understood principles of conflicts of laws it should have no extraterritorial effect. But if it defines the scope of the cause of action to which res judicata will apply, or if it sets up an estoppel against the party who does not comply with it, the defendant should be barred no matter where he attempts to sue. The effect of a judgment as res judicata is substantive and other jurisdictions must regard it as being as broad and conclusive as it would be in the jurisdiction in which it was rendered. So too if a party so conducts himself as to erect an estoppel against prosecution of his claim, the estoppel is personal to him and may be asserted against him wherever he sues. On such reasoning a number of State courts have properly held a claim barred for failure to plead it as a counterclaim in a Federal action. (London v. City of Philadelphia (1963), 412 Pa. 496, 194 A.2d 901; Horne v. Woolever (1959), 170 Ohio St. 178, 163 N.E.2d 378, cert. denied (1960), 362 U.S. 951, 4 L. Ed. 2d 868, 80 S. Ct. 861; Meacham v. Haley (1954), 35 Tenn. App. 20, 270 S.W.2d 503; Conrad v. West (1950), 98 Cal. App. 2d 116, 219 P.2d 477; Jocie Motor Lines, Inc. v. Johnson (1950), 231 N.C. 367, 57 S.E.2d 388; see Vestal, Claim Preclusion by Rule, 2 Ind. Leg. J. 25 (1968); 6 C. Wright & A. Miller, Federal Practice and Procedure: Civil sec. 1417, at 101-02 (1971).) Therefore, there are numerous cases binding the resident of a State to the compulsory counterclaim provisions of the Federal Rules of Civil Procedure even though the party may not be obligated to file a compulsory counterclaim under that State’s law. We find the reasoning of these cases persuasive and therefore find McDonald’s first point to be without merit.
McDonald’s second argument in its petition for rehearing is that this court has mistakenly determined that the stolen documents are relevant to the Federal claim and admissible in that proceeding. Specifically, McDonald’s contends that this court has wrongly assumed that the stolen documents may have any relevancy to the antitrust claims. We note that the tapes and documents were produced in the Federal action in response to McDonald’s discovery requests. McDonald’s acknowledged in its brief that at least 168 pages in the 386 documents at issue do relate to the franchise dispute. The Federal court will have to consider the overall circumstances under which the documents were obtained because these circumstances will directly bear on their admissibility and credibility as evidence against McDonald’s. These very circumstances of acquisition are, of course, the elements of McDonald’s present action in Illinois. Thus there will be wasteful duplication of judicial resources if two courts in different jurisdictions hear the same evidence. Additionally, there is the possibility that the two courts will reach contrary results. The fact that the two actions will involve the same evidence is one reason for treating the second action as a compulsory counterclaim. Great Lakes Rubber Corp. v. Herbert Cooper Co. (3d Cir. 1961), 286 F.2d 631.
Not only are the two actions intertwined in matters of evidence and the use of such evidence, they are also logically related as matters arising out of the franchise relationship between McDonald’s and the franchisees. McDonald’s demonstrated by filing count IX of its counterclaim in the Federal court that the fact the franchisees allegedly obtained the information in these documents without consent directly bore on the overall franchise relationship between the franchisees and McDonald’s. Count IX alleged that McDonald’s should be allowed to terminate their contract with the franchisees on the basis of frustration of purpose, because, among other things, the franchisees had secretly and improperly come into possession of copies of documents from McDonald’s files.
McDonald’s has treated the Federal action as though it only involved the franchisees’ antitrust claims but the Arizona action also involves a multicount counterclaim by McDonald’s which seeks to have the franchise agreements terminated on various grounds. Viewed in its entirety, therefore, the Federal action is very much concerned with the overall franchise relationship between the parties and particularly with the activities of the franchisees. As we stated in our opinion in a case in which a franchisee files a Federal antitrust claim against the franchisor, all counterclaims by the franchisor based on franchise-related activities are compulsory under Federal Rule 31(a). Crest Auto Supplies, Inc. v. Ero Manufacturing Co. (N.D. Ill. 1965), 246 F. Supp. 224, aff’d (7th Cir. 1966), 360 F.2d 896.
We note that although the issue of res judicata was extensively argued to the circuit court it declined to rely on this theory as a basis for its dismissal. The circuit court reasoned that res judicata was not a proper ground for dismissal because the Federal case is still pending. The circuit court’s rationale is erroneous because an interlocutory order dismissing certain counts of a counterclaim, while not an appealable judgment disposing of all issue in the lawsuit is, nevertheless, a final determination of the issues presented and is entitled to res judicata effect. (Calvert Fire Insurance Co. v. American Mutual Reinsurance Co. (N.D. Ill. 1978), 459 F. Supp. 859, 865, aff’d (7th Cir. 1979), 600 F.2d 1228.) Count IX of McDonald’s counterclaim in the Federal action was based on the same facts as the instant case, involved the same parties or their privies, and was a final adjudication on the merits. (Village of Northbrook v. Cook County (1980), 88 Ill. App. 3d 745, 410 N.E.2d 925.) Thus, res judicata bars plaintiff’s instant cause of action in this regard.
McDonald’s third argument in its petition for rehearing is that a motion to dismiss a claim on the grounds that it must have been asserted as a compulsory counterclaim in an earlier action may be granted only if the prior action has proceeded to judgment. Since the Federal case is still pending, the claims asserted in counts III and IV cannot be dismissed until the Federal action proceeds to judgment. Although several Federal district court cases support McDonald’s position, these decisions have been criticized as being inconsistent with the purpose of Federal Rule 13(a) since they permit duplicative litigation of the sort the rule is intended to prevent. 6 C. Wright & A. Miller, Federal Practice and Procedure: Civil sec. 1418, at 103-08 (1971). See, United Broadcasting Co. v. Armes (5th Cir. 1975), 506 F.2d 766, cert. denied (1975), 421 U.S. 965, 44 L. Ed. 2d 452, 95 S. Ct. 1953.
McDonald’s final argument is that even if Federal Rule 13(a) is controlling since the claims asserted in Counts III and IV were not available to McDonald’s at the time its answer was served in the original Federal action, its assertion in the instant case is not barred. The purpose of the “time of serving” exception is to relieve the counter-claimant from the burden of having to allege contingent claims or be forever barred from bringing them. However, this principle is not applicable where, as here, the acts supporting the claim have been alleged as a counterclaim in the lawsuit. If a party chooses to interpose an excepted counterclaim the court will treat it as a compulsory counterclaim in most respects. In this way the policy against multiplicity of litigation underlying Federal Rule 13(a) is advanced since all the logically related claims will be tried in one action. 6 C. Wright & A. Miller, Federal Practice and Procedure: Civil sec. 1413, at 68 (1971).
If the counterclaimant chooses to assert a claim, he is required under Federal Rule 13(a) to assert all of it, because the purpose behind the compulsory counterclaim is to consolidate all related claims in the same proceeding to preserve judicial economy. Regardless of whether McDonald’s was originally required to plead the claims asserted in the instant case as a compulsory counterclaim in the Federal action, it became so obligated when it alleged the identical acts in the Federal action in count IX of its Federal counterclaim. If the Arizona Federal district court had not dismissed count IX, its adjudication would have required the Federal court to decide the legality of the alleged recordings, and the alleged copying of documents and any attempt to bring the same allegations in Illinois would have been duplicative of the Federal action. Count IX was dismissed in the Federal action, and we cannot allow McDonald’s to avoid the jurisdiction of the Federal court and to avoid the bar of res judicata which exists by reason of this dismissal.
We do not think our result is harsh because under Federal Rule 13(f), the courts have power, which has been liberally exercised, to permit amendments to assert a compulsory counterclaim that has been omitted. (E.g., Safeway Trails, Inc. v. Allentown & Reading Transit Co. (4th Cir. 1950), 185 F.2d 918; 6 C. Wright & A. Miller, Federal Practice and Procedure: Civil sec. 1430, at 157-58 (1971).) In a deserving case it is even possible to reopen the judgment under Federal Rule 60(b), and allow pleading of the omitted compulsory counterclaim after the first action has been terminated. Williams v. Blitz (4th Cir. 1955), 226 F.2d 463.
We conclude that the arguments raised by McDonald’s in its petition for rehearing are without merit, and we adhere to the reasoning and result of our opinion.
Petition for rehearing denied.
VAN DEUSEN and HOPF, JJ., concur.