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Published by Jake Leahy

Final and Appealable or Interlocutory; Jurisdictional Questions (Butler Brothers v. HN Precision)

Jurisdictional questions integral in recent Second District case, reminder of jurisdictional questions related to final and appealable order, as compared to interlocutory appeal.
Masaaki Komori, Unsplash
February 7, 2023

NOTE: I will post several articles going through different portions of this case. The Second District’s 34 page opinion provides instructive guidance and thorough reasoning on several interesting issues. The case background is fairly fact-intensive, I tried to simplify it as much as possible.


In a long and procedurally intensive decision, the Second District Appellate Court reviewed on appeal claims against several parties alleging common law fraud, aiding and abetting fraud, and benefiting from a scheme to defraud. The three fraud related counts were brought against HN Precision (“HN”); Premier Industrial Group, LLC (“Premier”), a third-party purchaser; and HN’s president, Scott Narrol (“Mr. Narrol”), and an on-site employee of Butler Bros., Jeanne Perron (“Ms. Perron”). The Second District held that it the Lake County Circuit Court correctly dismissed each portion of the complaint.

Butler Bros. is Maine-based an industrial supplier which had worked with HN for nearly a decade. HN is a machine and manufacturing parts company, which constantly purchased thousands of dollars of materials from Butler Bros.. The companies worked together so close that Ms. Perron worked on site to manage HN’s storeroom. In short, HN would generally purchase products offered by a catalog from Butler Bros.. After reviewing the catalog, HN would put in a request to Butler Bros., who would then confirm availability and provide a quote. HN would then reply back to confirm the purchase. The parties met monthly to discuss inventory, issues, and future needs. Ms. Perron would often attend these regularly scheduled meetings. Further, the initial agreement between the parties in 2010 provides that only $50,000 of inventory should be advanced to HN, and that payment would be due within 75 days.

Over time, HN began to accumulate unpaid debts to Butler Bros.. HN eventually owed $378,000 by March 2020. At the time, the parties entered into a payment plan to catch up. Between August 2020 and January 2021, HN asked to extend the 75-day payment period, asked to extend a one-time 90 day payment period, and against repeatedly asked that the period of time be extended until April. Butler Bros. agreed to each and every of the payment revisions. The payments were extended during these times and during regular monthly meetings, HN discussed its ongoing financial woes. By April of 2021 payments had still not been made and the unpaid obligations were over $650,000.

In April 2021, Butler Bros. also learned that HN’s assets were purchased by Premier, after a secured party sale was undertaken. Premier was formed by a private equity firm in march of 2021. Correspondence from Premier indicated that discussions with HN had taken place for some months. Premier indicated that it would restructure the company and that it had no intention to paying for past receivables.


Butler Brothers Supply Division, LLC (“Butler Bros.”) filed suit against HN in August of 2021 in the Circuit Court of Lake County against the above mentioned parties. Count one alleged that HN, Mr. Narrol, and Ms. Perron committed common law fraud because they continued to push back payments dates, implying that payment will be made, all while the parties allegedly knew that payment would not be able to be made. Butler Bros. asserts that this knowledge and action amounted to a scheme to defraud. The second count alleged that Mr. Narrol and Ms. Perron aided and abetted the scheme to defraud, this was pleaded in the alternative to common law fraud. Count three was brought against Premier, alleging that the third party accepted the “fruits of the allegedly fraudulent scheme.”


The defendants filed a combined motion to dismiss counts one and two under sections 2-615 and 2-619. The defendants argued that the counts should be dismissed under several theories: a binding arbitration clause exists under the contract related to purchase orders; Butler Bros. attempts to use fraud when a breach of contract claim is correct; Butler Bros. fails to plead the elements of fraud; and there is not adequate specificity for the claim related to Ms. Narrol.


The plaintiff first responded that the claims fall outside the scope of the arbitration clause, since the contract language specifically pertains to claims “arising in connection,” with the contract, which Plaintiff contends should be construed narrowly. Rather than being in connection with the contract, plaintiff claims that the claims arise in connection instead to “lies, deceptions and fraudulent conduct.” Plaintiff further argued that it had sufficiently pleaded each element, and that the third-parties to the contract should not be bound to the arbitration clause.


While not brought up by either party, the Appellate Court’s first holding pertains to count one of the complaint. Count one was dismissed without prejudice and referred to arbitration. The court first reviews Illinois Supreme Court Rules 301, 303, and 304, which refer to when jurisdiction is proper for appeal. These are the only rules cited by the plaintiff for jurisdiction.

Ill. Sup. Ct. R. 301 (Emphasis added)

Every final judgment of a circuit court in a civil case is appealable as of right. The appeal is initiated by filing a notice of appeal. No other step is jurisdictional. An appeal is a continuation of the proceeding.

Ill. Sup. Ct. R. 303(a) (Emphasis added)

(1) The notice of appeal must be filed with the clerk of the circuit court within 30 days after the entry of the final judgment appealed from, or, if a timely posttrial motion directed against the judgment is filed, whether in a jury or a nonjury case, within 30 days after the entry of the order disposing of the last pending postjudgment motion directed against that judgment or order, irrespective of whether the circuit court had entered a series of final orders that were modified pursuant to postjudgment motions. A judgment or order is not final and appealable while a Rule 137 claim remains pending unless the court enters a finding pursuant to Rule 304(a). A notice of appeal filed after the court announces a decision, but before the entry of the judgment or order, is treated as filed on the date of and after the entry of the judgment or order. The notice of appeal may be filed by any party or by any attorney representing the party appealing, regardless of whether that attorney has filed an appearance in the circuit court case being appealed.

Ill. Sup. Ct. R. 304(a) (Emphasis added)

If multiple parties or multiple claims for relief are involved in an action, an appeal may be taken from a final judgment as to one or more but fewer than all of the parties or claims only if the trial court has made an express written finding that there is no just reason for delaying either enforcement or appeal or both. Such a finding may be made at the time of the entry of the judgment or thereafter on the court’s own motion or on motion of any party. The time for filing a notice of appeal shall be as provided in Rule 303. In computing the time provided in Rule 303 for filing the notice of appeal, the entry of the required finding shall be treated as the date of the entry of final judgment. In the absence of such a finding, any judgment that adjudicates fewer than all the claims or the rights and liabilities of fewer than all the parties is not enforceable or appealable and is subject to revision at any time before the entry of a judgment adjudicating all the claims, rights, and liabilities of all the parties.

Ill. Sup. Ct. R. 304(a) (Emphasis added)

When a case is dismissed without prejudice, then the trial court does not intend to have said order be “final and appealable,” which is necessary for the Appellate Court to have jurisdiction.1 Not only is the case dismissed without prejudice, but it also refers to the case to arbitration, which also does not amount to a final, and therefore not appealable, order.2 When this language without prejudice is included, the order entered is injunctive in nature and therefore is considered to be interlocutory, which means that it is explicitly not a final and appealable order. Therefore, the above-referenced Supreme Court rules do not provide jurisdiction to hear the appeal. Illinois Supreme Court Rule 307 however, does provide jurisdiction. The court writes that although the rule was not cited, the court can still have jurisdiction even if the proper rule for jurisdiction is not cited on appeal.3

Ill. Sup. Ct. R. 307(a)(1)

(a)Orders Appealable; Time. An appeal may be taken to the Appellate Court from an interlocutory order of court: (1) granting, modifying, refusing, dissolving, or refusing to dissolve or modify an injunction . . .

As the above-referenced Supreme Court Rule clearly lays out, jurisdiction is in fact proper when the order is interlocutory in nature. Injunctive relief, which the arbitration referral was, is in fact interlocutory in nature.

Conversely, the court finds that it has jurisdiction as to the other counts based on the initial Supreme Court Rules reviewed, which pertain to a final and appealable order. In the trial court’s order to these claims, the claim was dismissed with prejudice, which is generally deemed to be a final judgment of the court.4

The court further states that while the count in this section against HN was not final but instead interlocutory, the order also included the necessary language required under 304(a) to be final and appealable, the trial court included the language: “no just reason for delaying enforcement or appeal.” This language therefore, allows for jurisdiction to be proper against the rest of the defendants.


While Justice Hudson and the Second District eventually determine jurisdiction is proper, the absence of the plaintiff citing to the proper rule provides for an interesting analysis and helpful reminder from the court. For jurisdiction to be proper, generally the order must be either final and appealable, or be interlocutory. It is interesting to note that evidently this issue was not briefed, neither was it discussed at the oral arguments. One argument that was extensively discussed on appeal by the defendants and court was that this was merely an attempt by Butler Bros. to convert a breach of contract claim. It is noteworthy that the counts all pertain to some level of fraud, plaintiffs do not plead breach of contract at all.

1 Citing Flores v. Dugan, 91 Ill. 2d 108, 114 (1982); Schal Bovis, Inc. v. Casualty Insurance Co., 314 Ill. App. 3d 562, 568 (1999)

2 Citing Royal Indemnity Co. v. Chicago Hospital Risk Pooling Program, 372 Ill. App. 3d 562, 568 (1999)

3 Citing O’Banner v. McDonald’s Corp., 173 Ill. 2d 208, 211 (1996)

4 Citing Dubina v. Mesirow Realty Development, Inc., 178 Ill. 2d 496, 502 (1997)