Bar News - December 17, 2014
Scrutinizing New Hampshire’s Exception to Res Judicata
By: Michael Listner
Res judicata is a powerful tool for defendants in New Hampshire to defeat repetitive lawsuits brought by plaintiffs. It is also an affirmative defense used to great effect in a motion to dismiss.
Res judicata – Latin for “a matter [already] judged,” also known as claim preclusion – applies when three elements are met: “1) the parties must be the same or in privity with one another; 2) the same cause of action must be before the court in both instances; and 3) a final judgment on the merits must have been rendered in the first action,” according to Kalil v. Town of Dummer Zoning Bd. of Adjustment (2010).
Res judicata is difficult to overcome. A nuance in New Hampshire case law recognized an exception to its preclusive effect, but the Court’s current view of res judicata may have invalidated that exception.
The NH Supreme Court observed in Laconia National Bank v. Lavallee (1950) that if the issue in the present litigation was used only as a matter in evidence in the prior litigation, and it is not the same cause of action, then it will not be precluded by res judicata.
Laconia at first blush looks to offer plaintiffs an escape from the jaws of res judicata, but its utility is clouded because “cause of action,” as defined and applied by the Court in Laconia, is different from “cause of action,” as defined by current New Hampshire jurisprudence.
Under the writ system formerly employed by the New Hampshire courts, “cause of action” recognized the law/equity distinction and had a very narrow meaning. Under that meaning, the theory in the second case would not be barred by res judicata, if the theory pled in the second suit was unavailable to the plaintiff under the writ used in the first suit, given the same set of facts.
The Court’s decision in Eastern Marine Const. Corp. v. First Southern Leasing Ltd. (1987) revisited the definition of “cause of action” to reflect a more modern view. Eastern Marine dissolved the law/equity distinction so that a plaintiff can bring any and all claims that exist in both law and equity under a given set of facts. This definition of “cause of action” may invalidate the exception to res judicata in Laconia, because a plaintiff now has few if any excuses for not pleading all theories under the same set of facts.
The court found that the exception did apply in Lineham v. Southern New England Production Credit Ass’n, (1982), the last published opinion in which it addressed Laconia, but it has not addressed whether Laconia remains germane in the post-Eastern Marine environment. Nevertheless, the Court recently addressed the application of Laconia in a slip opinion in the matter of Michael S. Kurland v. Town of Brookline & a. (2014).
The plaintiff in Kurland attempted to use the exception in Laconia to escape the preclusive effect of res judicata that dismissed his action at law against the Town of Brookline. The Court remarked that the exception in Laconia did not apply because the plaintiff’s case arose out of the same set of operative facts. But, equally important, the Court departed from Lineham and observed that the distinction between matters in issue and matters in evidence, as applied in Laconia, arises only in the context of collateral estoppel. Thus, the Court now interprets Laconia in the context of the modern view of “cause of action” articulated in Eastern Marine and equates res judicata as used in Laconia to mean collateral estoppel.
This implies that the exception to res judicata in Laconia is now invalid. The present implication for plaintiffs is that Laconia can no longer be used to defeat the affirmative defense of res judicata. Nonetheless, Laconia may continue to be useful for plaintiffs to defeat the defense of collateral estoppel, but its continued validity as legal precedent is uncertain.
What is certain is that res judicata will continue to be an effective arrow in a defendant’s quiver no matter what the Court ultimately decides to do with Laconia.
Michael Listner focuses his practice on assisting attorneys with their litigation needs, including general and complex legal research, motions and appellate briefs. Contact him at (603) 833-0346 or visit www.nhlegalresearch.com or follow on Twitter @nhlegalrsrch.