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73 Continuing, the court explained that whether two complaints state the same claim for the purpose of the refiling rule does not depend upon how the plaintiff labels the complaint, but instead uses the same analysis as used in determining whether res judicata would attach, which is the "transactional test." e transactional test, which was adopted by the Illinois Supreme Court in River Park, Inc. v. City of Highland Park, 184 Ill.2d 290, 311 (1998): treats separate claims as the same cause of action "if they arise from a single group of operative facts." Courts should approach this inquiry "'pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage." e factual issues which gave rise to the refiling issue involved a mortgage executed on November 20, 2006, in favor of Waukegan Savings and Loan, which fell into default by July 2011. Waukegan Savings and Loan caused a foreclosure action to be filed in December 2011, which alleged that Cobo failed to make payments since July 1, 2011. First Midwest subsequently acquired its interest in the note and mortgage from Waukegan Savings and Loan and it caused the 2011 foreclosure action to be dismissed on April 6, 2013. Ten days later First Midwest filed a breach of the promissory note action ("suit on note") alleging a default for payments due since July 1, 2011. Prior to trial on the suit on note case, First Midwest caused the case to be dismissed on April 3, 2015. On July 30, 2015, First Midwest filed a suit against Cobo alleging breach of a promissory note and unjust enrichment, which also alleged the same default date of July 1, 2011. Applying the transactional test to the facts presented, the Illinois Supreme Court, held that all three of the cases, the 2011 foreclosure, the 2013 suit on the note, and the 2015 two count complaint asserting breach of a promissory note and unjust enrichment all arose out of the same group of operative facts. Each of the complaints alleged that Cobo was personally liable for same principal balance of $214,079.06, all sought a deficiency balance under the same note for the same default date. e court rejected First Midwest's contention that two distinct proceedings, a foreclosure action and a suit on note, cannot assert the same cause of action, finding that the transactional test treats two claims as identical "if they arise from a single group of operative facts, regardless of whether they assert different theories of relief." First Midwest argued that it would be unfair to lenders to use a transactional test because the foreclosure statutory form complaint requires a plaintiff to allege certain facts that could be used against it if decided to file a complaint based upon a different legal theory, such as breach of promissory note. e court held this was not a compelling objection. e court further explained that a plaintiff may pursue remedies under a mortgage and a note either consecutively or concurrently. Interestingly, the court held that a plaintiff seeking to foreclose upon a mortgage may not put a note at issue under the transactional test, despite conceding the interrelatedness of the documents, if a foreclosure plaintiff does not seek to adjudicate the parties' rights under the note. at said, a lender should be wary of this portion of the holding because the statutory form complaint utilized in foreclosure proceedings in Illinois typically includes a request for an adjudication of a deficiency judgment, if sought, and this reservation of the right to pursue a personal judgment is a claim for relief under the note. us, if the lender wants to preserve the right to file a suit on note later it should include instruction in a referral to remove the request for a personal deficiency from the foreclosure complaint. e court provided two examples as to claims that would not constitute a refiling of a prior action, claims against a guarantor, or for breach of a loan modification. is only works if these claims were not alleged in the first complaint. Unfortunately, the Court did not provide much guidance beyond the above with respect to determining what constitutes distinct operative facts in order to avoid an impermissible third filing. at said, in the event a second filing may require dismissal, it may be necessary to negotiate a loan modification agreement, to avoid an absolute bar to recovery. is is because a loan modification is a distinct transaction and thus constitutes new set of operative facts in the event a new default. With so many difficult challenges we are dealing with today, foreclosure practitioners must be aware of the procedural history of their case to avoid taking action which may place their client's ability to recover in jeopardy. While it is a relatively quick process to request counsel dismiss an action, both counsel and their client must closely consider all the ramifications behind doing so in order to not run afoul of the single refiling rule in Illinois. Brian Merfeld is a Partner with McCalla Raymer Leibert Pierce, LLC. Merfeld specializes in foreclosure related litigation, association issues, and federal matters. He represents lenders as both a plaintiff 's attorney and a defense attorney, with litigation experience in chancery actions, law division cases and evictions. Merfeld 's expertise extends to both state and federal court, at trial and appellate court levels. He attended DePaul University, College of Law. Marcos Posada is the Managing Partner for McCalla Raymer Leibert Pierce, LLC's Illinois Litigation Practice Group. Posada manages the retention of Illinois litigation matters and works to represent our clients as Litigation Counsel for outside matters. In addition to having daily oversight over the firm's entire portfolio of litigated matters, Posada is directly involved in the firm's Appellate cases. Marcos was a 2019 ALFN JPEG Award Winner and participates in the Legal League 100, the Complex Litigation Practice Group of the American Legal and Financial Network, Co-Chair; and the USFN, Diversity and Inclusion Committee Member.

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