Tuesday, March 04, 2008, 9:05 PM

COA Reverses Res Judicata Ruling

Today, in a product liability action, the Court of Appeals (COA) held that the trial court erred in dismissing claims based on res judicata. The case is Skeen v. Warren & Sweat Mfg. The decision is unpublished. Judge Jackson concurred in the result only.

Plaintiff filed a number of claims: negligence, breach of warranty, fraud, and unfair/deceptive trade practices (UDTP). Plaintiff then took a voluntary dismissal of the first two claims (negligence and warranty). Summary judgment was granted to defendant on the remaining two claims (fraud and UDTP), and plaintiff's appeal of that judgment was dismissed.

Plaintiff then filed a new complaint to raise the two claims he had previously voluntarily dismissed without prejudice (negligence and warranty). The trial court ruled that the preclusive effect of the earlier summary judgment barred those claims under the doctrine of res judicata. The COA disagreed.

The Court relied on the principle that "where a plaintiff has suffered multiple wrongs at the hands of a defendant, a plaintiff may normally bring successive actions, or, at his option, may join several claims together in one lawsuit." (Emphasis in original) The Court then reasoned that plaintiff's negligence and warranty claims couldn't have been brought but for the malfunction of the product and plaintiff's ensuing injury, whereas the fraud and UDTP claims were predicated on the labeling of the product as "certified." On this basis the Court concluded that the previously rejected claims (fraud and UDTP) "do not rely on the same sets of operative facts as the negligence and breach of warranty claims and the issues involved are different; therefore, they cannot be considered to be the same cause of action." Consequently, the Court said, res judicata couldn't apply.

The Court then added that because the negligence and warranty claims had been voluntarily dismissed without prejudice, there was no final judgment on the merits as to those claims in the earlier case, and therefore res judicata couldn't apply. The Court reasoned that if the pleadings didn't raise a claim later presented, the later presented claim isn't barred by res judicata. But that seems difficult to square with the settled law, repeated many times over by the Supreme Court, that "the doctrine of res judicata which precludes relitigation of the same cause of action is broader in its application than a mere determination of the questions involved in the prior action"; the "bar of the judgment in such cases extends not only to matters actually determined, but also to other matters which in the exercise of due diligence could have been presented for determination in the prior action." Gaither Corp. v. Skinner, 241 N.C. 532, 535-36(N.C.1955) (emphasis added). Thus, as the COA previously has observed in earlier cases, "the doctrine of res judicata has been accordingly expanded to apply to those issues which could have been raised in the prior action.” Caswell Realty Associates I, L.P. v. Andrews Co., Inc., 496 S.E.2d 607, 610-11 (1998) (emphasis added).

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