Can Collateral Estoppel Be Applied Considering Prior Litigation With the Same Corporation but With a Different President ?
In C.I.S., Inc. v. Kann, 76 Ill. App. 3d 109, 394 N.E.2d 916, 31 Ill. Dec. 714 (1979), the court affirmed an entry of summary judgment and applied collateral estoppel concerning a finding from prior litigation based on the relationship between the defendant corporation and the individual corporate officer defendant. CIS., Inc., 76 Ill. App. 3d at 109, 394 N.E.2d at 918.
The defendants in CIS. maintained they were to be directors of the corporation and that there was a joint venture, but the president of the corporation asserted they were merely its employees and that the bonuses they had each taken from C.I.S. funds were unauthorized. C.I.S., Inc., 76 Ill. App. 3d at 110, 394 N.E.2d at 917.
In the earlier action by the defendants to prevent their removal from the business, the trial court found that the bonuses taken by the defendants were unauthorized and that there was no evidence of a joint venture. C.I.S., Inc., 76 Ill. App. 3d at 110, 394 N.E.2d at 917.
While that case was pending on appeal, the corporation commenced the C.I.S. action against the defendants, seeking recovery of the bonuses.
The defendants argued that collateral estoppel based on the previous case should not apply because the parties were not the same, as the president of C.I.S. was the party in the previous litigation, whereas the corporation itself was the party in the CIS. litigation. C.I.S., Inc., 76 Ill. App. 3d at 110, 394 N.E.2d at 917. the court disagreed, finding that the president of C.I.S. owned or controlled the corporation's stock at the time of the prior litigation.