Davenport v. Djourabchi
Opinion
81,7('67$7(6',675,&7&2857 )257+(',675,&72)&2/80%,$ BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 678$570,//6'$9(13257et al. 3ODLQWLIIV Y &LYLO$FWLRQ1R $%- %$%$.'-285$%&+,et al. 'HIHQGDQWV BBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB 0(025$1'8023,1,21
3ODLQWLII6WXDUW0LOOV'DYHQSRUWLVWKHRSHUDWRUDQGVROHRZQHURI%LJ%HDU&DIp//&D
UHVWDXUDQW RQ WKH ORZHU OHYHO RI WKH PXOWLVWRU\ URZKRXVH ZKHUH KH DQG KLV IDPLO\ OLYH $P
&RPSO>'NW @± 'HIHQGDQWV%DEDN'MRXUDEFKLDQG0RQLFD:HOWDUHKXVEDQGDQG
ZLIHDQGWKH\ZHUH'DYHQSRUW¶VQHLJKERUVId.¶ 2Q6HSWHPEHUGHIHQGDQWVORDQHG
'DYHQSRUW DQG LQ WXUQ KH H[HFXWHG D3URPLVVRU\ 1RWH IRU %XVLQHVV DQG &RPPHUFLDO
3XUSRVHV ³1RWH´ LQIDYRURIGHIHQGDQWVId. ([WR$P&RPSO>'NW @ ³1RWH´
7KLVFDVHDULVHVRXWRIGHIHQGDQWV¶HIIRUWVWRFROOHFWRQWKHGHEWDQGWKHEDQNUXSWF\SURFHHGLQJV
WKDWIROORZHG
2Q2FWREHU'DYHQSRUWILOHGIRU&KDSWHUEDQNUXSWF\SURWHFWLRQLQWKH86
%DQNUXSWF\&RXUWIRUWKH'LVWULFWRI&ROXPELDWRSUHYHQWDWKUHDWHQHGIRUHFORVXUHRQKLVSURSHUW\
E\GHIHQGDQWV$P&RPSO±'HIHQGDQWVILOHGDSURRIRIFODLPZLWKWKHEDQNUXSWF\
FRXUW DOOHJLQJ WKDW 'DYHQSRUW RZHG WKHP XQGHU WKH 1RWH Id. 'DYHQSRUW
REMHFWHGFODLPLQJWKDWKHRZHGRQO\Id.7KHEDQNUXSWF\FRXUWKHOGDWULDOWR
,Q'HFHPEHUSODLQWLII'DYHQSRUWILOHGDFRPSODLQWLQWKLV&RXUWDJDLQVWGHIHQGDQWV DQGKHDPHQGHGWKHFRPSODLQWDVRIULJKWRQ)HEUXDU\DGGLQJ%LJ%HDU&DIpDVDVHFRQG SODLQWLIISee &RPSO>'NW@ $P&RPSO GHWHUPLQHWKHDPRXQWGXHXQGHUWKH1RWHDQGRQ-XO\LWUXOHGWKDW'DYHQSRUWZDVQRW
LQGHIDXOWDQGWKDWKHRZHGId.± ([ WR$P&RPSO>'NW @ ³%DQNU
0HP´ ([WR$P&RPSO>'NW @ ³%DQNU2UGHU´
'DYHQSRUWDQGWKH&DIpILOHGDFRPSODLQWLQWKLV&RXUWDULVLQJRXWRIGHIHQGDQWV¶HIIRUWVWR
HQIRUFHWKH1RWHSee $P&RPSO3ODLQWLIIVKDYHEURXJKWDVHULHVRIFRPPRQODZDQGVWDWXWRU\
FODLPVDQGGHIHQGDQWVKDYHPRYHGWRGLVPLVVWKHFRPSODLQWLQLWVHQWLUHW\SXUVXDQWWR)HGHUDO
5XOHRI&LYLO3URFHGXUH E 'HIV¶0RWWR'LVPLVV$P&RPSO>'NW@ ³'HIV¶0RW´
7KH\DUJXHWKDWDOOVHYHQFRXQWVDUHEDUUHGE\WKHGRFWULQHRIres judicataDQGDOWHUQDWLYHO\WKDW
WKH\ DUH OHJDOO\ GHIHFWLYH DQG IDFWXDOO\ XQVXSSRUWHG 'HIV¶ 3 $ LQ 6XSS RI 'HIV¶ 0RW
>'NW@ ³'HIV¶0HP´ DW±
%HFDXVHSODLQWLIIVFRXOGKDYHEURXJKWWKHLUFODLPVLQWKHSULRUEDQNUXSWF\SURFHHGLQJWKH
&RXUWFRQFOXGHVWKDWDOOVHYHQRISODLQWLIIV¶FRXQWVDUHEDUUHGE\res judicata7KHUHIRUHWKH&RXUW
ZLOO JUDQW WKH PRWLRQ WR GLVPLVV 7KLV RSLQLRQ VKRXOG QRW EH LQWHUSUHWHG LQ DQ\ ZD\ DV DQ
HQGRUVHPHQWRIGHIHQGDQWV¶WDFWLFVKRZHYHU
%$&.*5281'
3ODLQWLII'DYHQSRUWILOHGWKLVODZVXLWRQ'HFHPEHU&RPSO>'NW@DQGILOHG
DQDPHQGHGFRPSODLQWRQ)HEUXDU\ZKLFKDGGHG%LJ%HDU&DIpDVDVHFRQGSODLQWLII
$P&RPSO7KHDPHQGHGFRPSODLQWDOOHJHVWKHIROORZLQJIDFWVZKLFKWKH&RXUWPXVWDFFHSWDV
WUXHIRUWKHSXUSRVHRIUHVROYLQJWKHSHQGLQJPRWLRQWRGLVPLVV
2Q6HSWHPEHUGHIHQGDQWVORDQHG'DYHQSRUWDQGKHH[HFXWHGD1RWHLQ
WKHLU IDYRU IRU ZLWK LQWHUHVW ZKLFK KDG D PDWXULW\ GDWH RI 6HSWHPEHU $P
3ODLQWLIIVRSSRVHGWKHPRWLRQRQ0DUFK3OV¶3 $LQ2SSWR'HIV¶ 0RW >'NW@ ³3OV¶2SS´ DQGGHIHQGDQWVILOHGDUHSO\RQ$SULO'HIV¶5HSO\3 $LQ )XUWKHU6XSSRI'HIV¶0RW>'NW@ ³'HIV¶5HSO\´ &RPSO 1RWH 7KH ORDQ ZDV VHFXUHG E\ 'DYHQSRUW¶V SURSHUW\ DW VW 6WUHHW 1:
:DVKLQJWRQ'&WKHORFDWLRQRI%LJ%HDU&DIp$P&RPSO see 1RWH ([WR$P
&RPSO>'NW @ ³'HHGRI7UXVW´ $OWKRXJKWKH1RWHZDVPDGHWR'DYHQSRUWLQGLYLGXDOO\
DQGQRWWRWKH&DIpGHIHQGDQWVDQG'DYHQSRUWXQGHUVWRRGWKDW'DYHQSRUWZRXOGXVHWKHORDQWR
SD\ RII SHUVRQDO REOLJDWLRQV ZKLFK ZRXOG HQDEOH KLP WR LQYHVW PRUH LQ WKH EXVLQHVV $P
&RPSO±
8QGHUWKHWHUPVRIWKH1RWH'DYHQSRUWFRXOGQRWEHJLQWRSD\WKHSULQFLSDOHDUO\XQOHVV
KHSDLGLWDOODWRQFH$P&RPSO see 1RWH+HFRXOGDQGGLGSD\LQWHUHVWHDUO\WKRXJK
$P&RPSO ± see1RWH)RU\HDUV'DYHQSRUWEHOLHYHGKHZDVSD\LQJPRQH\WKDWKH
RZHGRQWKH1RWHEXWKHZDVDFWXDOO\SD\LQJDKHDGRIVFKHGXOHWKHUHE\FUHDWLQJDFUHGLWZLWK
GHIHQGDQWVWRZDUGVIXWXUHREOLJDWLRQV$P&RPSO ±
3XUVXDQWWRWKHWHUPVRIWKH1RWH'DYHQSRUWZRXOGEHLQGHIDXOWLIKHIDLOHGWRPDNHD
SD\PHQWDQGWKDWIDLOXUHFRQWLQXHGIRUIRXUGD\V$P&RPSO see 1RWH,IKHZDVLQGHIDXOW
GHIHQGDQWV FRXOG IRUHFORVH RQ KLV SURSHUW\ $P &RPSO see 1RWH ,Q -DQXDU\
GHIHQGDQWVLQIRUPHG'DYHQSRUWWKDWKHZDVLQGHIDXOWRQWKH1RWHEHFDXVHKHKDGIDOOHQEHKLQG
WKHSD\PHQWVRQKLVILUVWPRUWJDJHRQWKHSURSHUW\DQGWKDWWKH\ZHUHDFFHOHUDWLQJWKH1RWHDQG
UHTXLULQJKLPWRSD\WKHIXOOSULQFLSDOE\6HSWHPEHU$P&RPSO±7KHVHWHUPV
ZHUHQRWLQFOXGHGLQWKH1RWHDQG'DYHQSRUWZDVLQIDFWQRWLQGHIDXOWId. 'HIHQGDQWV
WKUHDWHQHGWRIRUHFORVHRQ'DYHQSRUW¶VSURSHUW\LIKHGLGQRWPDNHDIXOO³OXPSVXP´SD\PHQW
Id. 7KH\WROG'DYHQSRUWUHSHDWHGO\WKDWKHZDVUHTXLUHGWRPDNHDGGLWLRQDOSD\PHQWVHDFK
PRQWK DQG WKH\ GHPDQGHG WKDW KH SURYLGH WKHP ZLWK ILQDQFLDO LQIRUPDWLRQ DERXW WKH &DIp
Id. ± see ([WR$P&RPSO>'NW @ ³(PDLOV´ 'DYHQSRUWFRPSOLHGZLWKPRVW
RIWKHVHUHTXHVWVSee $P&RPSO. 'HIHQGDQWVFRQWLQXHGWRPDNHGHPDQGVWKRXJKDQG
WKH\SHUVLVWHGLQWKHLUIDOVHDFFXVDWLRQWKDW'DYHQSRUWZDVLQGHIDXOWId.± see (PDLOV
'DYHQSRUWILOHGIRU&KDSWHUEDQNUXSWF\SURWHFWLRQLQWKH86%DQNUXSWF\&RXUWIRUWKH
'LVWULFWRI&ROXPELDRQ6HSWHPEHU ZKLFKSUHYHQWHGGHIHQGDQWVIURPIRUHFORVLQJRQKLV
SURSHUW\$P&RPSO±7KHEDQNUXSWF\FRXUWDSSURYHG'DYHQSRUW¶VEDQNUXSWF\SODQ
DQG KH FRQWLQXHG PDNLQJ HDUO\ PRQWKO\ SD\PHQWV WR GHIHQGDQWV Id. ± 'XULQJ
'DYHQSRUW¶VILUVWEDQNUXSWF\SURFHHGLQJGHIHQGDQWVILOHGWZRSURRIVRIFODLPRQHRQ2FWREHU
DQGWKHRWKHURQ6HSWHPEHUERWKDVVHUWLQJWKDW'DYHQSRUWRZHGRQO\XQGHU
WKH1RWHId. see ([WR$P&RPSO>'NW @ ([WR$P&RPSO>'NW @
2Q1RYHPEHUGHIHQGDQWVWROG'DYHQSRUWKHKDGEHHQLQGHIDXOWVLQFH1RYHPEHU
$P&RPSO,WZDVDWWKLVSRLQWWKDW'DYHQSRUWREWDLQHGOHJDOFRXQVHODQGUHDOL]HGKHKDG
EHHQRYHUSD\LQJGHIHQGDQWVId.
2Q 0DUFK 'DYHQSRUW ILOHG D 'HEWRU¶V &RUUHFWHG $SSOLFDWLRQ LQ KLV ILUVW
EDQNUXSWF\ FDVH DOOHJLQJ WKDW GHIHQGDQWV YLRODWHG WKH EDQNUXSWF\ FRXUW¶V RUGHUV ZKHQ WKH\
GHPDQGHG H[WUD PRQWKO\ SD\PHQWV $P &RPSO 'HIHQGDQWV FRQWHVWHG WKLV DOOHJDWLRQ
FODLPLQJWKDW'DYHQSRUWKDGEHHQLQGHIDXOWVLQFHWKHH[HFXWLRQRIWKH1RWHId.± 7KH
EDQNUXSWF\FRXUWGHQLHG'DYHQSRUWUHOLHIDQGGLGQRWGHFLGHKRZPXFKKHRZHGXQGHUWKH1RWH
GHIHQGDQWVWRRNWKHSRVLWLRQWKDWKHRZHGId.± see ([WR$P&RPSO
>'NW @
'HIHQGDQWVDWWHPSWHGWRIRUHFORVHRQWKHSURSHUW\LQ6HSWHPEHU$P&RPSO
see ([WR$P&RPSO>'NW @2Q2FWREHU'DYHQSRUWILOHGKLVVHFRQG&KDSWHU
EDQNUXSWF\SHWLWLRQWRVWD\WKHDWWHPSWHGIRUHFORVXUHVDOH$P&RPSO±'XULQJWKH
VHFRQG EDQNUXSWF\ FDVH GHIHQGDQWV ILOHG D SURRI RI FODLP DOOHJLQJ WKDW 'DYHQSRUW RZHG
XQGHU WKH 1RWH Id. 'DYHQSRUW REMHFWHG DQG DUJXHG WKDW KH RZHG RQO\
Id.7KHEDQNUXSWF\FRXUWKHOGDWULDOWRGHWHUPLQHWKHDPRXQWGXHXQGHUWKH
1RWH,WFRQFOXGHGWKDW'DYHQSRUWRZHGGXHWRDFUHGLWLQKLVIDYRUWKDWKHKDGQHYHU
EHHQLQGHIDXOWDQGWKDWGHIHQGDQWV¶UHSUHVHQWDWLRQVUHJDUGLQJKRZPXFK'DYHQSRUWRZHGKLV
NQRZOHGJHDQGWKHFODLPHGDJUHHPHQWVEHWZHHQWKHSDUWLHVFRQWUDU\WRWKHWHUPVRIWKH1RWHZHUH
QRWFUHGLEOHId. see %DQNU0HP %DQNU2UGHU
7KHFRPSODLQWDOOHJHVWKDWWKURXJKRXWWKHSDUWLHV¶LQWHUDFWLRQVGHIHQGDQWVKDYHKDUDVVHG
'DYHQSRUW DQG WKDW SODLQWLIIV KDYH VXIIHUHG DV D UHVXOW RI GHIHQGDQWV¶ PLVUHSUHVHQWDWLRQV DQG
DFWLRQVUHJDUGLQJWKH1RWHSee $P&RPSO±±± &RXQW
,DOOHJHVZURQJIXOIRUHFORVXUHRQ'DYHQSRUW¶VSURSHUW\$P&RPSO±3ODLQWLIIVDOOHJH
WKDWGHIHQGDQWVLQLWLDWHGIRUHFORVXUHZKHQWKH\NQHZRUVKRXOGKDYHNQRZQWKDW'DYHQSRUWZDV
QRWLQGHIDXOWId. &RXQWV,,DQG9,,DOOHJHWKDWGHIHQGDQWVEUHDFKHGWKHLUFRQWUDFWZLWK'DYHQSRUW
DQG%LJ%HDU&DIpE\LQVWLWXWLQJIRUHFORVXUHSURFHHGLQJVZKHQ'DYHQSRUWZDVQRWLQGHIDXOWRQ
WKH1RWHDQGWKDWWKH\EUHDFKHGWKHGXW\RIJRRGIDLWKDQGIDLUGHDOLQJId.± ±
&RXQW,,,DOOHJHVWKDWGHIHQGDQWVYLRODWHG'&&RGHet seq.E\GLVSDUDJLQJSODLQWLIIV¶
EXVLQHVVWKURXJKIDOVHRUPLVOHDGLQJUHSUHVHQWDWLRQVRIPDWHULDOIDFWVId.±3ODLQWLIIV
DOOHJH LQ WKLV &RXUW WKDW GHIHQGDQWV KDUDVVHG 'DYHQSRUW DW ZRUN GLVUXSWHG %LJ %HDU &DIp¶V
RSHUDWLRQV PDGH EDVHOHVV DQG DQRQ\PRXV FRPSODLQWV WR WKH KHDOWK GHSDUWPHQW VSUHDG UXPRUV
DERXWWKH&DIpDQGIDOVHO\OLVWHGWKHSURSHUW\IRUVDOHId.&RXQW,9DOOHJHVWKDWGHIHQGDQWV
HQJDJHGLQXQODZIXOWUDGHSUDFWLFHVLQYLRODWLRQRI'&&RGH Id.±&RXQWV
9DQG9,DOOHJHWKDWGHIHQGDQWVWRUWLRXVO\LQWHUIHUHGZLWKSODLQWLIIV¶EXVLQHVVDQGFDXVHGSODLQWLIIV
ILQDQFLDOKDUGVKLSE\LQVWLWXWLQJZURQJIXOIRUHFORVXUHSURFHHGLQJVDQGFRQGXFWLQJLQSHUVRQVLW
LQVDW%LJ%HDU&DIpId.±
67$1'$5'2)5(9,(:
³7RVXUYLYHD>5XOH E @PRWLRQWRGLVPLVVDFRPSODLQWPXVWFRQWDLQVXIILFLHQWIDFWXDO
PDWWHUDFFHSWHGDVWUXHWRVWDWHDFODLPWRUHOLHIWKDWLVSODXVLEOHRQLWVIDFH´Ashcroft v. Iqbal
86 LQWHUQDOTXRWDWLRQPDUNVRPLWWHG accord Bell Atl. Corp. v. Twombly
86 ,QUXOLQJXSRQDPRWLRQWRGLVPLVVIRUIDLOXUHWRVWDWHDFODLPDFRXUW
PD\RUGLQDULO\FRQVLGHURQO\³WKHIDFWVDOOHJHGLQWKHFRPSODLQWGRFXPHQWVDWWDFKHGDVH[KLELWV
RULQFRUSRUDWHGE\UHIHUHQFHLQWKHFRPSODLQWDQGPDWWHUVDERXWZKLFKWKH&RXUWPD\WDNHMXGLFLDO
QRWLFH´Gustave-Schmidt v. Chao)6XSSG ''& FLWDWLRQVRPLWWHG
$1$/<6,6
'HIHQGDQWVKDYHPRYHGWRGLVPLVVDOOVHYHQFRXQWVLQWKHDPHQGHGFRPSODLQWXQGHUWKH
GRFWULQHRIres judicata'HIV¶0HPDW7KHGRFWULQHEDUVSDUWLHV³IURPUHOLWLJDWLQJLVVXHV
WKDW ZHUH RU FRXOG KDYH EHHQ UDLVHG´LQDSUHYLRXVDFWLRQAllen v. McCurry 86
FLWLQJ Cromwell v. Cty. of Sac 86 8QGHU WKLV SULQFLSOH ³D
VXEVHTXHQWODZVXLWZLOOEHEDUUHGLIWKHUHKDVEHHQSULRUOLWLJDWLRQ LQYROYLQJWKHVDPHFODLPV
RUFDXVHRIDFWLRQ EHWZHHQWKHVDPHSDUWLHVRUWKHLUSULYLHVDQG WKHUHKDVEHHQDILQDOYDOLG
MXGJPHQWRQWKHPHULWV E\DFRXUWRIFRPSHWHQWMXULVGLFWLRQ´Smalls v. United States
)G '&&LU FLWDWLRQVRPLWWHG 7KHVHWUDGLWLRQDOUXOHVRIres judicata³DSSO\
WRWKHGHFLVLRQVRIEDQNUXSWF\FRXUWV´Katchen v. Landy86 FLWLQJChicot
Cty. Drainage Dist. v. Baxter State Bank86± 6LQFHDOOIRXUHOHPHQWV
RIres judicataKDYHEHHQPHWLQWKLVFDVHSODLQWLIIVDUHEDUUHGIURPEULQJLQJWKHLUFODLPVLQWKH
SUHVHQWDFWLRQ
, 3ODLQWLIIV¶FODLPVFRQVWLWXWHWKHVDPHFODLPVRUFDXVHRIDFWLRQ
³:KHWKHUWZRFDVHVLPSOLFDWHWKHVDPHFDXVHRIDFWLRQWXUQVRQZKHWKHUWKH\VKDUHWKH
VDPHµQXFOHXVRIIDFWV¶´Drake v. FAA )G '&&LU TXRWLQJPage v. United
States )G '& &LU ³>,@W LV WKH IDFWV VXUURXQGLQJ WKH WUDQVDFWLRQ RU
RFFXUUHQFH ZKLFK RSHUDWH WR FRQVWLWXWH WKH FDXVH RI DFWLRQ QRW WKH OHJDO WKHRU\ XSRQ ZKLFK D
OLWLJDQWUHOLHV´Page )GDWTXRWLQJExpert Elec., Inc. v. Levine)G
G &LU 7KH '& &LUFXLW KDV ³HPEUDFHG WKH 5HVWDWHPHQW 6HFRQG RI -XGJPHQWV¶
SUDJPDWLF WUDQVDFWLRQDO DSSURDFK WR GHWHUPLQLQJ ZKDW FRQVWLWXWHV D FDXVH RI DFWLRQ´ DQG KDV
H[SODLQHGWKDWWKH5HVWDWHPHQWJLYHV³ZHLJKWWRVXFKFRQVLGHUDWLRQVDVZKHWKHUWKHIDFWVDUHUHODWHG
LQWLPHVSDFHRULJLQRUPRWLYDWLRQ´U.S. Indus., Inc. v. Blake Constr. Co.)G
'&&LU TXRWLQJ5HVWDWHPHQW 6HFRQG RI-XGJPHQWV 7KHGHWHUPLQDWLRQ
RIZKHWKHUWZRFDVHVLQYROYHWKHVDPHFDXVHRIDFWLRQUHTXLUHVFRQVLGHUDWLRQRIQRWRQO\FODLPV
WKDWZHUHDFWXDOO\UDLVHGLQSULRUOLWLJDWLRQEXWDOVRPDWWHUVWKDW³FRXOGKDYHEHHQUDLVHGLQWKDW
DFWLRQ´Allen 86DWFLWLQJCromwell 86DW
+HUHDOORISODLQWLIIV¶FODLPVDULVHIURPWKHVDPHQXFOHXVRIIDFWVLQYROYHGLQ'DYHQSRUW¶V
&KDSWHU SURFHHGLQJ DQG WKH SURRI RI FODLP GHFLGHG E\ WKH EDQNUXSWF\ FRXUW See $P
&RPSO± %DQNU0HP%RWKGLVSXWHVLQYROYHWKHLQWHUSUHWDWLRQDQGHQIRUFHPHQWRIWKH
1RWH'DYHQSRUW¶VSD\PHQWVXQGHUWKH1RWHDQGGHIHQGDQWV¶DWWHPSWVWRIRUHFORVHRQWKHSURSHUW\
See$P&RPSO± %DQNU0HP
3ODLQWLIIVDUJXHWKDWWKHLUQHZFODLPVGRQRWPHHWWKHWUDQVDFWLRQDOWHVWEHFDXVHWKHIDFWV
VXUURXQGLQJWKHSUHVHQWFODLPV³LQYROYHDVXEVWDQWLDOO\PRUHH[SDQVLYHWLPHVSDFHRULJLQDQG
PRWLYHWKDQWKHOLPLWHGIDFWVUHVROYHGE\WKH%DQNUXSWF\&RXUW´3OV¶2SSDW%XWLWGRHV
QRWPDWWHUZKDWIDFWXDOTXHVWLRQVWKHSUHYLRXVFRXUWDFWXDOO\UHVROYHGSee Drake )GDW
7KHGLVSRVLWLYHLVVXHLVZKHWKHUWKHQHZFODLPVDULVHRXWRIWKHVDPHVHWRIIDFWVDQGZKHWKHUWKH
SODLQWLIIcould KDYHUDLVHGWKHPLQWKHSUHYLRXVSURFHHGLQJId.+HUHWKHUHDUHQRQHZIDFWVJLYLQJ
ULVH WR QHZ SRVVLEOH FODLPV DQG SODLQWLIIV DUH ³VLPSO\ UDLVLQJ D QHZ OHJDO WKHRU\´ ZKLFK LV
³SUHFLVHO\ZKDWLVEDUUHGE\UHVMXGLFDWD´Apotex, Inc. v. FDA )G± '&&LU
3ODLQWLIIV DOVR DUJXH WKDW ZKHQres judicata LV DSSOLHG LQ WKH EDQNUXSWF\ FRQWH[W FRXUWV
FRQVLGHU ZKHWKHU D VXEVHTXHQW LQGHSHQGHQW MXGJPHQW ZRXOG ³LPSDLU GHVWUR\ FKDOOHQJH RU
LQYDOLGDWHWKHHQIRUFHDELOLW\RUHIIHFWLYHQHVV´RIWKHEDQNUXSWF\GHFLVLRQZKHQGHWHUPLQLQJLIWKH
DFWLRQLQYROYHVWKHVDPHFODLPVRUFDXVHVRIDFWLRQDVWKHEDQNUXSWF\SURFHHGLQJ3O¶V2SSDW
TXRWLQJIn re Residential Capital, LLC%5 %DQNU6'1< $QGFRXUWV
KDYHUHOLHGXSRQWKDWWKHRU\WREDUVXEVHTXHQWFODLPV%XWSODLQWLIIVPDLQWDLQWKDWWKHQHZFODLPV
VKRXOGEHDOORZHGWRJRIRUZDUGEHFDXVHWKH³ULJKWVRULQWHUHVWVHVWDEOLVKHGLQWKHSULRUMXGJPHQW
ZRXOG>not@EHGHVWUR\HGRULPSDLUHGE\SURVHFXWLRQ´RIWKLVDFWLRQ3OV¶2SSDW±FLWLQJ
Siegel v. Fed. Home Loan Mortg. Corp. )G WK &LU HPSKDVLV DGGHG
See, e.g. Capitol Hill Grp. v. Pillsbury, Winthrop, Shaw, Pittman, LLC )G '&&LU DSSO\LQJWKH³LPSDLUPHQW´IDFWRUWRFRXQWHUFODLPVDVVHUWHGLQWKHEDQNUXSWF\ FRQWH[WDQGEDUULQJVXEVHTXHQWPDOSUDFWLFHFODLPVDJDLQVWDQDWWRUQH\DIWHUWKHEDQNUXSWF\FRXUW KDG SUHYLRXVO\ DZDUGHG DWWRUQH\V¶ IHHV DQG FRPPHQWHG RQ WKH DGHTXDF\ RI WKH DWWRUQH\¶V UHSUHVHQWDWLRQ Robertson v. Cartinhour)6XSSG ''& SUHFOXGLQJFODLP XQGHU res judicata VLQFH ³LW ZRXOG HVVHQWLDOO\ QXOOLI\ WKH MXU\¶V ILQGLQJV´ LQ WKH SUHYLRXV EDQNUXSWF\OLWLJDWLRQ Marbury Law Grp., PLLC v. Carl )6XSSG ''& QRWLQJWKDWWKH³QXOOLILFDWLRQH[FHSWLRQ´LV³QDUURZ´DQG³SURYLGHVWKDWDSDUW\will EHSUHFOXGHG IURPEULQJLQJDIXWXUHVXLWRQDFODLPWKDWFRXOGKDYHEHHQDVVHUWHGLQDSULRUDFWLRQ´ HPSKDVLV LQRULJLQDO see also Corbett v. MacDonald Moving Servs., Inc.)G± G&LU REVHUYLQJWKDWWKH³LPSDLUPHQW´IDFWRULV³DQDVSHFWIRUWKHWHVWIRULGHQWLW\RIWKHFDXVHV RI DFWLRQ´ EXW XOWLPDWHO\ FRQFOXGLQJ WKDW WKH FDXVHV RI DFWLRQ ZHUH WKH VDPH EHFDXVH WKH\ ³LQYROYH>G@WKHVDPHWUDQVDFWLRQ´VRWKHFODLPVZHUHEDUUHG +RZHYHUSODLQWLIIVKDYHQRWSRLQWHGWRDQ\DXWKRULW\WKDWKROGVWKDWDQDEVHQFHRILPSDLUPHQWLV
UHOHYDQWWRWKHres judicata DQDO\VLV
%HFDXVHDOORIWKHIDFWVLQWKHFRPSODLQWDULVHRXWRIWKHVDPHORDQWUDQVDFWLRQWKDWVHUYHG
DVWKHEDVLVIRUWKHEDQNUXSWF\SURFHHGLQJWKH&RXUWFRQFOXGHVWKDWWKHFODLPVFRQVWLWXWHWKHVDPH
FDXVHRIDFWLRQIRUSXUSRVHVRIres judicata
,, 3ODLQWLIIV¶FODLPVDUHEHWZHHQWKHVDPHSDUWLHVRUWKHLUSULYLHV
7KH GRFWULQH RI res judicata DSSOLHV RQO\ LI WKH SULRU MXGJPHQW ZDV EHWZHHQ ³WKH VDPH
SDUWLHVRUWKHLUSULYLHV´Drake )GDWTXRWLQJParklane Hosiery Co. v. Shore 86
Q +HUHWKHSULRUEDQNUXSWF\SURFHHGLQJZDVEHWZHHQGHIHQGDQWVDQGSODLQWLII
'DYHQSRUWRQO\EXWVLQFH%LJ%HDU&DIpLVLQSULYLW\ZLWK'DYHQSRUWIRUres judicata SXUSRVHV
WKLVHOHPHQWRIres judicata LVPHW
³7KH WHUP µSULYLW\¶ LV DQ HOXVLYH FRQFHSW ZLWKRXW DQ\ SUHFLVH GHILQLWLRQ RI JHQHUDO
DSSOLFDELOLW\,WLVVXIILFLHQWWKDWWKHZRUGGHVLJQDWHVDSHUVRQVRLGHQWLILHGLQLQWHUHVWZLWKD
3ODLQWLIIVSRLQWWREvans v. First Mount Vernon, ILA)6XSSG ''& WRVXSSRUWWKHLUDVVHUWLRQWKDWWKHFXUUHQWFODLPVGRQRWFRQVWLWXWHWKHVDPHFDXVHRIDFWLRQEHFDXVH WKH\ GR QRW LPSDLU WKH EDQNUXSWF\ FRXUW¶V MXGJPHQW 3OV¶ 2SS DW %XW WKH FDVH LV GLVWLQJXLVKDEOH DQG LW ZDV QRW GHFLGHG RQ WKDW EDVLV ,Q Evans WKH SODLQWLII FRQVHQWHG WR KHU &KDSWHUFRQILUPDWLRQLQEDQNUXSWF\FRXUWDQGGLGQRWREMHFWWRDQ\FODLPV)6XSSGDW ±7KHFRXUWKHOGWKDWFODLPVDULVLQJRXWRIWKHFRQILUPDWLRQZHUHQRWEDUUHGE\res judicata EHFDXVH³LVVXHVWKDWPXVWEHUHVROYHGWKURXJKDGYHUVDU\SURFHHGLQJVDUHQRWSDUWRIWKH&KDSWHU FRQILUPDWLRQSURFHVVDQGXQOHVVWKH\DUHDFWXDOO\OLWLJDWHG&KDSWHUSODQFRQILUPDWLRQVZLOO QRWKDYHSUHFOXVLYHHIIHFWDVWRWKRVHLVVXHV´Id.DW+HUHSODLQWLIIVGLGFKDOOHQJHGHIHQGDQWV¶ SURRIRIFODLPLQWKHEDQNUXSWF\SURFHHGLQJVDQGWKRVHLVVXHVZHUHDFWXDOO\OLWLJDWHGSee%DQNU 0HPDW)XUWKHUEvans QHYHUPHQWLRQVWKH³LPSDLUPHQW´IDFWRUEXWUDWKHUUHOLHVRQWKHJHQHUDO res judicataIDFWRUVLQFRPLQJWRLWVGHFLVLRQ7KHFRXUWIRXQGWKDWWKHSODLQWLII¶VFODLPVZHUHQRW EDUUHG EHFDXVH ³WKH\ KD>G@ QRW EHHQ VXEMHFW WR D ILQDO MXGJPHQW RQ WKH PHULWV´ Id. DW 3ODLQWLIIV DOVR FLWH Gaudin v. Saxon Mortgage Services, Inc. )6XSS G 1' &DO IRU WKH VDPH SURSRVLWLRQ 3OV¶ 2SS DW +RZHYHU Gaudin QHYHU GLVFXVVHV WKH LPSDLUPHQWWKHRU\See Gaudin)6XSSGDW7KH&RXUWKHOGWKDWres judicata GLGQRW EDUWKHSODLQWLII¶VVXEVHTXHQWDFWLRQEHFDXVH³LW>GLG@QRWLPSOLFDWHDQ\RIWKHPDWWHUVWKDWZHUH UDLVHGE\>WKHSODLQWLII¶V@SURRIRIFODLPLQWKHEDQNUXSWF\SURFHHGLQJ´Id.
SDUW\WRIRUPHUOLWLJDWLRQWKDWKHUHSUHVHQWVSUHFLVHO\WKHVDPHOHJDOULJKWLQUHVSHFWWRWKHVXEMHFW
PDWWHULQYROYHG´Jefferson Sch. of Soc. Sci. v. Subversive Activities Control Bd.)G
'& &LU :KHQ WZR SDUWLHV DUH LQ SULYLW\ WKHLU UHODWLRQVKLS ³LV VXFK WKDW D MXGJPHQW
LQYROYLQJRQHRIWKHPPD\MXVWO\EHFRQFOXVLYHXSRQWKHRWKHU>@´HYHQWKRXJKWKHRWKHUZDVQRW
DSDUW\WRWKHMXGJPHQWGill & Duffus Servs., Inc. v. A. M. Nural Islam)G '&
&LU
³>1@RQSDUW\ SUHFOXVLRQ PD\ EH MXVWLILHG EDVHG RQ D YDULHW\ RI SUHH[LVWLQJ µVXEVWDQWLYH
OHJDOUHODWLRQVKLS>V@¶EHWZHHQWKHSHUVRQWREHERXQGDQGDSDUW\WRWKHMXGJPHQW´DVZHOODVZKHQ
DSDUW\ZDV³µDGHTXDWHO\UHSUHVHQWHGE\VRPHRQHZLWKWKHVDPHLQWHUHVWVZKR>ZD@VDSDUW\¶WRWKH
VXLW´Taylor v. Sturgell86 FLWDWLRQVRPLWWHG seeRemy Enter. Grp., LLC
v. Davis)6XSSG± ''& ILQGLQJ//&ZDVLQSULY\ZLWKLWVVROHPHPEHU
IRUSXUSRVHVRIFODLPSUHFOXVLRQ Ying Qing Lu v. Lezell )6XSSG ''&
FRQFOXGLQJWKDWWKHSDUWLHVZHUHLQSULYLW\EHFDXVHWKHUHZDVQR³PHDQLQJIXOGLVWLQFWLRQEHWZHHQ
>SODLQWLII@WKHLQGLYLGXDODQGKLVFRPSDQ\´
'DYHQSRUWWKHSDUW\WRWKHSULRUEDQNUXSWF\SURFHHGLQJsee%DQNU0HPDW³PDLQWDLQV
DRZQHUVKLSLQWHUHVW´LQ%LJ%HDU&DIp$P&RPSO,QOLJKWRIWKLVVXEVWDQWLYHOHJDO
UHODWLRQVKLS'DYHQSRUWFDQEHVDLGWRKDYHUHSUHVHQWHGWKH&DIp¶VLQWHUHVWVLQWKHSULRUEDQNUXSWF\
SURFHHGLQJVRDVWRSUHFOXGHWKH&DIpIURPUHDVVHUWLQJFODLPVWKDWZHUHRUFRXOGKDYHEHHQPDGH
LQWKHSULRUFDVH,QGHHGWKHRZQHUVKLSRIWKH&DIpDQGGHIHQGDQWV¶HIIRUWVWRIRUHFORVHRQWKH
SURSHUW\ZHUHWKHGULYLQJIDFWRUEHKLQGWKHHQWLUHEDQNUXSWF\SURFHHGLQJ
7KH&RXUWQRWHGWKDW³>T@XDOLI\LQJUHODWLRQVKLSVLQFOXGHbut are not limited toSUHFHGLQJ DQGVXFFHHGLQJRZQHUVRISURSHUW\EDLOHHDQGEDLORU>@DVVLJQHHDQGDVVLJQRU´DQG³VXLWVEURXJKW E\WUXVWHHVJXDUGLDQVDQGRWKHUILGXFLDULHV´Taylor86DW HPSKDVLVDGGHG 3ODLQWLIIV PDLQWDLQ WKDW %LJ %HDU &DIp FDQQRW EH IRXQG WR EH LQ SULYLW\ ZLWK 'DYHQSRUW
EHFDXVH³%LJ%HDUKDGQRLQWHUHVWZKDWVRHYHULQWKH>EDQNUXSWF\@PDWWHU´3OV¶2SSDW%XW
SODLQWLIIV¶DPHQGHGFRPSODLQWDOOHJHVWKDWWKH&DIpZDV³XVHGWRVHFXUHWKH1RWH´WKH1RWHZDV
LQWHQGHGWR³UHGXFHWKHILQDQFLDOSUHVVXUHRQ'DYHQSRUWDQGDOORZKLPWRLQYHVWPRUHUHVRXUFHV
LQWR%LJ%HDU´WKHEDQNUXSWF\SURFHHGLQJZDVLQVWLWXWHGWRIRUHVWDOOIRUHFORVXUHRQWKH&DIpDQG
WKDWGXULQJWKHEDQNUXSWF\SURFHHGLQJGHIHQGDQWVGHPDQGHG³ILQDQFLDOLQIRUPDWLRQRQ%LJ%HDU
FODLPLQJWKDWWKH\ZHUHHQWLWOHGWRWKHLQIRUPDWLRQWRHQVXUHWKHLUµLQYHVWPHQW¶ZDVVDIH´$P
&RPSO±±±*LYHQWKRVHIDFWVDQG'DYHQSRUW¶VVROHRZQHUVKLSRIWKH
EXVLQHVVWKH&RXUWILQGVSODLQWLIIVWREHLQSULYLW\IRUres judicataSXUSRVHV
,,, 7KHSULRUEDQNUXSWF\SURFHHGLQJZDVDILQDOYDOLGMXGJPHQWRQWKHPHULWV
$MXGJPHQWRQWKHPHULWVLVRQHWKDWUXOHVRQWKHVXEVWDQWLYHJURXQGVRIWKHFODLPQRWRQ
GHIHFWVRIIRUPRUSURFHGXUHSee United States v. Kearney)G '&&LU
3ODLQWLIIVGRQRWGLVSXWHWKDWWKHEDQNUXSWF\SURFHHGLQJZDVDILQDOYDOLGMXGJPHQWRQWKHPHULWV
3OV¶ 2SS DW ± ³'HIHQGDQWV DUJXH DQG >S@ODLQWLIIV GR QRW GLVSXWH WKDW WKH EDQNUXSWF\
FRXUW>¶V@UXOLQJFRQVWLWXWHVDµILQDOYDOLGMXGJPHQW¶RQWKHSUHFLVHDPRXQW'DYHQSRUWRZHG
XQGHUWKHQRWH´ 7KHUHIRUHWKLVHOHPHQWRIres judicata LVVDWLVILHG
,9 7KHEDQNUXSWF\FRXUWLVDFRXUWRIFRPSHWHQWMXULVGLFWLRQ
7KH6XSUHPH&RXUWKDVGHVFULEHGD³FRXUWRIFRPSHWHQWMXULVGLFWLRQ´DV³DFRXUWZLWKDQ
H[LVWLQJVRXUFHRIVXEMHFWPDWWHUMXULVGLFWLRQ´Lightfoot v. Cendant Mortg. Corp.6&W
FLWLQJEx parte Phenix Ins. Co.86 +HUHWKHEDQNUXSWF\FRXUWKDG
MXULVGLFWLRQRYHUGHIHQGDQWV¶SURRIRIFODLPDJDLQVW'DYHQSRUWsee 86& E DQG
SODLQWLIIVGRQRWDUJXHWKDWWKHEDQNUXSWF\FRXUWZDVQRWDFRXUWRIFRPSHWHQWMXULVGLFWLRQUHJDUGLQJ
WKLVPDWWHU5DWKHUWKH\DUJXHWKDWWKHFODLPVWKH\QRZEULQJEHIRUHWKLV&RXUWDUHFODLPVRYHU
ZKLFKWKHEDQNUXSWF\FRXUWODFNHGMXULVGLFWLRQXQGHUStern v. Marshall86 3OV¶
2SSDW±
%DQNUXSWF\ FRXUWV KDYH MXULVGLFWLRQ WR ³KHDU DQG HQWHU ILQDO MXGJPHQWV LQ µDOO FRUH
SURFHHGLQJV XQGHU WLWOH ¶´ Stern 86 DW TXRWLQJ 86& E ³>&@RUH
SURFHHGLQJVDUHWKRVHWKDWDULVHLQDEDQNUXSWF\FDVHRUXQGHU7LWOH´Id.DW7KH\³LQFOXGH
EXWDUHQRWOLPLWHGWR´VL[WHHQGLIIHUHQWW\SHVRIPDWWHUVVXFKDVWKH³DOORZDQFHRUGLVDOORZDQFH
RIFODLPVDJDLQVWWKHHVWDWH´DVZHOODV³FRXQWHUFODLPVE\WKHHVWDWHDJDLQVWSHUVRQVILOLQJFODLPV
DJDLQVWWKHHVWDWH´86& E :LWKUHVSHFWWRQRQFRUHFODLPVZKLFKDUH³RWKHUZLVH
UHODWHGWRDFDVHXQGHUWLWOH´EDQNUXSWF\FRXUWVKDYHVWDWXWRU\DXWKRULW\WRKHDUWKHSURFHHGLQJV
DQG³VXEPLWSURSRVHGILQGLQJVRIIDFWDQGFRQFOXVLRQVRIODZWRWKHGLVWULFWFRXUW´ F
7KHGLVWULFWFRXUWPXVWWKHQUHYLHZWKHSURSRVHGILQGLQJVDQGFRQFOXVLRQVde novoDQGHQWHUDQ\
ILQDOMXGJPHQWId. 7KHRQHVWDWXWRU\H[FHSWLRQWRWKLVJHQHUDOUXOHLVLIDOOSDUWLHVFRQVHQWWKH
EDQNUXSWF\MXGJHPD\³KHDUDQGGHWHUPLQHDQG>@HQWHUDSSURSULDWHRUGHUVDQGMXGJPHQWV´DVLI
WKHSURFHHGLQJZHUHFRUH F
,QStern v. MarshallWKH6XSUHPH&RXUWGHWHUPLQHGWKDWVRPHFODLPVODEHOHGE\&RQJUHVV
DV³FRUH´PD\QRWEHDGMXGLFDWHGE\DEDQNUXSWF\FRXUWLQWKHPDQQHUGHVFULEHGE\VWDWXWHSee
Stern 86 DW see also 86& E ,W KHOG WKDW DOWKRXJK FRXQWHUFODLPV DUH
JHQHUDOO\ODEHOHGDV³FRUH´SURFHHGLQJVEDQNUXSWF\MXGJHVGRQRWKDYHWKHFRQVWLWXWLRQDODXWKRULW\
XQGHU$UWLFOH,,,WRHQWHUILQDOMXGJPHQWVRQFHUWDLQFRXQWHUFODLPVVXFKDVWKRVHDULVLQJXQGHU
VWDWHFRPPRQODZSee Stern86DW Exec. Benefits Ins. Agency v. Arkison6&W
7KHVHFODLPVDUHQRZUHIHUUHGWRDVStern FODLPVSee Stern 86DW
Exec. Benefits Ins. Agency 6 &W DW GHVFULELQJ D Stern FODLP DV ³D FODLP
GHVLJQDWHGIRUILQDODGMXGLFDWLRQLQWKHEDQNUXSWF\FRXUWDVDVWDWXWRU\PDWWHUEXWSURKLELWHGIURP
SURFHHGLQJLQWKDWZD\DVDFRQVWLWXWLRQDOPDWWHU´
,QExecutive Benefits Insurance Agency v. ArkisonWKH6XSUHPH&RXUWIXUWKHUFODULILHGWKDW
³ZKHQDEDQNUXSWF\FRXUWLVSUHVHQWHGZLWK>DStern@FODLPWKHSURSHUFRXUVHLVWRLVVXHSURSRVHG
ILQGLQJVRIIDFWDQGFRQFOXVLRQVRIODZ´MXVWOLNHWKHEDQNUXSWF\FRXUWZRXOGGRLIWKHFODLPZDV
QRQFRUH Exec. Benefits6&W DW VWDWLQJWKDWWKHEDQNUXSWF\VWDWXWH SHUPLWV
Stern FODLPV WR SURFHHG DV QRQFRUH SURFHHGLQJV see Stern 86 DW H[SODLQLQJ WKDW
UHPRYDO RI FHUWDLQ VWDWH ODZ FRXQWHUFODLPV IURP FRUH EDQNUXSWF\ MXULVGLFWLRQ GRHV QRW
³PHDQLQJIXOO\FKDQJH>@WKHGLYLVLRQRIODERULQWKHFXUUHQWVWDWXWH´IRUEDQNUXSWF\FRXUWV 7KH
6XSUHPH&RXUWZHQWRQHVWHSIXUWKHULQWellness International NetworkLtd. v. SharifKROGLQJ
WKDWSDUWLHVPD\FRQVHQWWRWKHILQDODGMXGLFDWLRQRIStern FODLPVE\DEDQNUXSWF\FRXUWMXVWDV
WKH\PD\GRZLWKUHJDUGWRQRQFRUHFODLPV6&W ± ³>:@HFRQFOXGH
WKDWDOORZLQJEDQNUXSWF\OLWLJDQWVWRZDLYHWKHULJKWWR$UWLFOH,,,DGMXGLFDWLRQRIStern FODLPVGRHV
QRWXVXUSWKHFRQVWLWXWLRQDOSUHURJDWLYHVRI$UWLFOH,,,FRXUWV´
7KH'&&LUFXLWKDVQRWUXOHGRQZKHWKHUres judicataDSSOLHVWRQRQFRUHFODLPVLIWKH
SDUWLHVGLGQRWUDLVHWKRVHFODLPVLQDSULRUEDQNUXSWF\SURFHHGLQJ%XWDOPRVWHYHU\&LUFXLWWKDW
KDVDGGUHVVHGWKLVLVVXHKDVKHOGWKDWres judicataDSSOLHVWRFODLPVWKDWFRXOGKDYHEHHQEURXJKW
LQWKHEDQNUXSWF\SURFHHGLQJUHJDUGOHVVRIZKHWKHUWKRVHFODLPVZRXOGKDYHEHHQFRUHRUQRQ
FRUHSee, e.g. In re Int’l Nutronics )G ± WK&LU KROGLQJWKDWQRQFRUH
FODLPVQRWUDLVHGLQEDQNUXSWF\SURFHHGLQJZHUHEDUUHGE\res judicataEHFDXVHWKH\FRXOGKDYH
EHHQDVVHUWHGZKLFKLVHQRXJKIRUres judicataSXUSRVHVHYHQLIWKHEDQNUXSWF\FRXUWFRXOGQRW
KDYHUHQGHUHGDILQDOGHFLVLRQ Plotner v. AT&T Corp.)G WK&LU
VDPH CoreStates Bank, N.A. v. Huls Am., Inc.)G G&LU VDPH Sanders
Confectionery Prod., Inc. v. Heller Fin., Inc. )G WK&LU VDPH Sure-Snap
Corp. v. State St. Bank & Tr. Co. )G ± G&LU VDPH 7KHVHGHFLVLRQV
ILQGLQJ res judicata DSSOLFDEOH WR QRQFRUH EDQNUXSWF\ SURFHHGLQJV UHVW RQ WKH WKHRU\ WKDW WKH
EDQNUXSWF\ FRXUW FRXOG KDYH UHQGHUHG D ILQDO MXGJPHQW RQ WKH QRQFRUH FODLPV LI WKH SDUWLHV
FRQVHQWHGDQGWKDWHYHQZLWKRXWWKHSDUWLHV¶FRQVHQWWKHEDQNUXSWF\FRXUWFRXOGKDYHKHDUGWKH
QRQFRUHFODLPVDQGGHYHORSHGSURSRVHGILQGLQJVRIIDFWDQGFRQFOXVLRQVRIODZDQGWKRVHFODLPV
ZRXOGKDYHWKHQEHHQGHFLGHGE\WKHGLVWULFWFRXUWSee, e.g. In re Int’l Nutronics)GDW
see also 86& F ± 7KXVWKHZHLJKWRIH[LVWLQJDXWKRULW\LVLQIDYRURIDSSO\LQJ
res judicata WRDQ\QRQFRUHFODLPWKDWFRXOGKDYHEHHQEURXJKWLQWKHEDQNUXSWF\SURFHHGLQJDQG
WKH&RXUWZLOODSSO\WKDWUHDVRQLQJKHUH
1RFRXUWKDV\HWDGGUHVVHGZKHWKHUWKHORJLFEHKLQGWKHVHFDVHVZRXOGDOVRDSSO\WRStern
FODLPV+RZHYHUWKH6XSUHPH&RXUWLWVHOIKDVVDLGWKDWLWVGHFLVLRQLQSternGLGQRWFKDQJHWKH
GLYLVLRQRIODERUIRUEDQNUXSWF\FRXUWVStern86DWDQGLWKDVFODULILHGWKDWStern FODLPV
DUHWREHWUHDWHGDVQRQFRUHFODLPVSee Exec. Benefits6&WDW6RDEVHQWH[SOLFLW
7ZRFLUFXLWVKDYHKHOGWKDWres judicataGRHVQRWDSSO\LIWKHFODLPVZRXOGKDYHEHHQQRQ FRUHSURFHHGLQJVSee Barnett v. Stern )G ± WK&LU H[SODLQLQJWKDWQRQ FRUHFODLPQRWUDLVHGLQEDQNUXSWF\SURFHHGLQJZDVQRWEDUUHGE\res judicataEHFDXVHres judicata FDQRQO\EDUSUHYLRXVO\XQDVVHUWHGFRUHFODLPV Howell Hydrocarbons, Inc. v. Adams )G WK&LU VDPH 7KHVHFDVHVKRZHYHUGR³QRWWDNHDFFRXQWRIWKHIDFWWKDWDQRQ FRUHFODLPFDQEHDVVHUWHGLQEDQNUXSWF\FRXUWHYHQWKRXJKILQDOGHFLVLRQZLOOWDNHSODFHLQGLVWULFW FRXUW´ In re Int’l Nutronics )G DW 0RUHRYHU ERWK &LUFXLWV KDYH VXEVHTXHQWO\ TXHVWLRQHGWKHVHSUHYLRXVKROGLQJVSee Matrix IV, Inc. v. Am. Nat’l Bank & Tr. Co. )G ± WK&LU VWDWLQJWKDWVLQFHBarnettWKH6HYHQWK&LUFXLW³KDVFRQWLQXHGWRDSSO\ res judicata LQ WKH EDQNUXSWF\ FRQWH[W ZLWKRXW UHIHUHQFH WR WKH FRUHQRQFRUH GLVWLQFWLRQ´ EXW UHIXVLQJWRRYHUWXUQWKHFDVHEHFDXVHLWFRXOGGHFLGHWKHFXUUHQWFDVHRQQDUURZHUJURXQGV In re Baudoin )GQ WK&LU VWDWLQJLQDIRRWQRWHWKDWWKH&LUFXLWLVQRWVXUH WKDW ³EDQNUXSWF\ MXULVGLFWLRQ PXVW DOZD\V EH FRUH LQ RUGHU WR EH µFRPSHWHQW¶ IRU res judicata SXUSRVHV´ GLUHFWLRQIURPWKH&LUFXLWWRWKHFRQWUDU\LWDSSHDUVDSSURSULDWHWRDSSO\WKHUXOHWKDWZRXOGDSSO\
WRRWKHUQRQFRUHFODLPV
+HUHDOWKRXJKWKHEDQNUXSWF\FRXUWFRXOGQRWKDYHLVVXHGDILQDOMXGJPHQWRQSODLQWLIIV¶
QRQFRUHRUStern FODLPVZLWKRXWWKHSDUWLHV¶FRQVHQWsee Wellness Int’l6&WDW ±
SODLQWLIIVFRXOGKDYHEURXJKWWKHLUFXUUHQWFODLPVLQWKHEDQNUXSWF\SURFHHGLQJ Stern86
DW7KHEDQNUXSWF\FRXUWZRXOGKDYHWKHQLVVXHGDILQDOMXGJPHQWLIWKHSDUWLHVKDGFRQVHQWHG
RULWZRXOGKDYHVXEPLWWHGSURSRVHGILQGLQJVRIIDFWDQGFRQFOXVLRQVRIODZWRWKHGLVWULFWFRXUW
DQGWKHGLVWULFWFRXUWZRXOGKDYHUHQGHUHGDILQDOMXGJPHQWDVSDUWRIWKDWSURFHHGLQJSee id.DW
Exec. Benefits6&WDW 86& F ± 7KHEDQNUXSWF\
FRXUWZDVWKHUHIRUHDFRXUWRIFRPSHWHQWMXULVGLFWLRQDVWRDOORISODLQWLIIV¶FODLPVDQGWKLVODVW
HOHPHQWRIres judicata LVVDWLVILHG
7KH&RXUWGRHVQRWQHHGWRGHFLGHZKHWKHUSODLQWLIIV¶SUHVHQWFODLPVZRXOGKDYHEHHQFRUH RUQRQFRUHSURFHHGLQJVEHFDXVHLWLVXOWLPDWHO\LUUHOHYDQWWRWKHDSSOLFDWLRQRIres judicata See Plotner)GDW H[SODLQLQJWKDWWKHFRXUWGLGQRWKDYHWRGHFLGHZKHWKHUFODLPVZHUH FRUHRUQRQFRUHEHFDXVH³WKDWGHWHUPLQDWLRQKDVQRHIIHFWRQWKHGLVSRVLWLYHLVVXHRIUHVMXGLFDWD´ +RZHYHULWGRHVDSSHDUWKDWSODLQWLIIV¶FODLPVZRXOGEHFDWHJRUL]HGDVHLWKHUQRQFRUHFODLPVRU Stern FODLPVSee Stern86DW± ILQGLQJDFRXQWHUFODLPIRUWRUWLRXVLQWHUIHUHQFHZDV QRWD³FRUH´FODLPDQGEHFDPHDStern FODLP Van Dorn Retail Mgmt., Inc. v. Sovran Bank/DC Nat’l, Inc.1R :/DW Q ''&2FW ³,WKDVKRZHYHUEHHQ JHQHUDOO\HVWDEOLVKHGWKDWFODLPVRIEUHDFKRIFRQWUDFWDQGFRQYHUVLRQDUHFRQVLGHUHGµQRQFRUH¶ SURFHHGLQJVDQGWKXVUHPRYHGIURPWKHEDQNUXSWF\FRXUW¶VMXULVGLFWLRQ´ &21&/86,21
7KH&RXUWILQGVWKDWSODLQWLIIV¶FRPSODLQWLVEDUUHGE\WKHGRFWULQHRIres judicataVRLWZLOO
JUDQWGHIHQGDQWV¶PRWLRQWRGLVPLVVXQGHU5XOH E $VHSDUDWHRUGHUZLOOLVVXH
$0<%(50$1-$&.621 8QLWHG6WDWHV'LVWULFW-XGJH '$7( 1RYHPEHU
Reference
- Status
- Published