## Facts

- In an Indiana dissolution proceeding, Charles O. Finley testified under oath that he owned 31% of the stock of Charles O. Finley & Company, Inc., his wife owned 29%, and their children owned 40%.
- The Indiana court relied on that ownership characterization in dividing marital property and entered a decree consistent with it; the decree was affirmed on appeal in Indiana.
- After the Indiana judgment became final, Finley filed an Illinois declaratory-judgment action alleging he was the beneficial owner of the 40% of shares held in the children’s names.
- The Illinois trial court dismissed the complaint, reasoning that Illinois public policy barred Finley from repudiating his prior sworn testimony and the decree that adopted it.
- Finley appealed, arguing that Full Faith and Credit required Illinois to apply Indiana’s collateral-estoppel doctrine, including Indiana’s mutuality requirement.

## Issues

1. Whether the Full Faith and Credit Clause required Illinois to apply Indiana’s mutuality-based collateral-estoppel rules when assessing the effect of the Indiana divorce decree.
2. Whether Illinois law barred Finley, on estoppel and public-policy grounds, from asserting a position inconsistent with his prior sworn testimony and the Indiana decree regarding stock ownership.

## Decision

- The Illinois Appellate Court affirmed dismissal of the Illinois declaratory-judgment action.
- Full Faith and Credit required Illinois to respect the Indiana judgment’s validity and finality, but did not require Illinois to import Indiana’s mutuality requirement for collateral estoppel.
- Under Illinois law, Finley was estopped from contradicting his earlier sworn testimony and the Indiana decree that relied on it by claiming beneficial ownership of the 40% stock interest.

## Legal Principles

- Full Faith and Credit obligates a forum state to recognize and give effect to a sister-state judgment’s finality, but does not necessarily bind the forum to the sister state’s specific collateral-estoppel mechanics (including mutuality).
- Illinois courts may apply Illinois preclusion and estoppel doctrines to protect the integrity of judicial proceedings while still honoring the sister-state judgment.
- A party may be estopped from taking a position inconsistent with prior sworn testimony and a prior judgment that adopted or relied on that testimony, particularly where the later position would undermine judicial reliability and finality.

## Conclusion

Illinois gave effect to the Indiana divorce decree while applying Illinois estoppel policy to bar Finley from repudiating his sworn ownership testimony and relitigating stock ownership through a later declaratory action.


Finley v. Kesling, 105 Ill. App. 3d 1, 433 N.E.2d 1112 (Ill. App. Ct. 1982)