BatesCarey’s David J. Buishas and Mark A. Deptula secured a unanimous ruling in Illinois’ First District Court of Appeals affirming the dismissal of a fraud and breach of contract lawsuit brought by Adrenaline Sports Management, Inc. against Greenlayer LLC in the Circuit Court of Cook County. 

The dispute arose from a forum battle between two competing lawsuits brought by Greenlayer and Adrenaline Sports Management in Illinois and Oregon state court.

Greenlayer is an Oregon-based company that sells apparel and other race-related goods to promoters of sporting events. Adrenaline is an Illinois event management company specializing in the production of such events. In 2016, the two parties negotiated a contract whereby Greenlayer agreed to provide race-day apparel to Adrenaline for a Chicago event. 

When Greenlayer sent shipments of the products, Adrenaline accepted the merchandise but refused to pay, citing issues with the products’ quality. Greenlayer then sent Adrenaline a demand letter seeking full payment in exchange for a “full, mutual release,” and attached a draft complaint to be filed in Oregon state court. Adrenaline promised to pay, asked Greenlayer not to file suit, and then raced to file suit against Greenlayer in Illinois state court alleging fraud and breach of contract. The very next day, Greenlayer filed its own lawsuit against Adrenaline in Oregon state court arising out of the same contractual dispute.

Greenlayer filed a motion to dismiss Adrenaline’s Illinois lawsuit under 735 ILCS 5/2-619(a)(3), arguing that the two lawsuits involved the same claims between the same parties and that allowing the two lawsuits to proceed simultaneously would potentially result in inconsistent results and reward Adrenaline’s gamesmanship. After several rounds of argument, the Illinois court sided with Greenlayer and dismissed Adrenaline’s complaint. Adrenaline appealed. 

The Illinois First District Court of Appeals affirmed the circuit court’s dismissal of the Illinois lawsuit against Greenlayer, finding that the two competing proceedings involved the same parties and the same cause.  The court also stressed that dismissing Adrenaline’s complaint was necessary to prevent Adrenaline from benefiting from “vexatious and harassing” litigation tactics by feigning interest in settlement only to beat Greenlayer to the courthouse and file suit first in Oregon.  

The court also rejected Adrenaline’s argument that Greenlayer should be judicially estopped from arguing that the Illinois and Oregon actions involved the same cause because Greenlayer did not make factually inconsistent statements in the Oregon and Illinois proceedings nor provide contradictory descriptions of the facts giving rise to the parties’ claims, as necessary to demonstrate judicial estoppel.