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Brief Summary: In order to apply the doctrine of res judicata to bar a second cause of action filed by the plaintiff over the same issues in dispute, the first cause of action must be dismissed “on the merits”. In other words, a procedural or technical dismissal of the first cause of action will not allow a second cause of action to be barred under the doctrine of res judicata.
Analysis: The recent Tennessee Court of Appeals decision of J. M. Hanner Construction Company,, Inc. v. Thomas Brothers Construction Company, Inc., E2011-01641-COA-R9-CV, 2012 WL 3012639 (Tenn. Ct. App. July 24, 2012) discussed the requirements to obtain a dismissal of a case based on the doctrine of res judicata in Tennessee. Res judicata is a doctrine that is defined as “a final judgment on the merits by a court having jurisdiction is conclusive between the parties to a suit as to all matters that were litigated or that could have been litigated in that suit.” (Quote from The Free Dictionary). The Hanner case dealt with a situation where the plaintiff filed an initial complaint that was dismissed due to the failure of the plaintiff to meet signing requirements set forth in Rule 11.01 of the Tennessee Rules of Civil Procedure. A second complaint was later filed and the defendant requested a dismissal of that case based on the doctrine of res judicata.
The Tennessee Court of Appeals noted the required elements that must be established by a party asserting a res judicata defense as follows:
(1) a court of competent jurisdiction rendered the prior judgment, (2) the prior judgment was final, (3) the same parties or their privies were involved in both proceedings, and (4) both proceedings involved the same cause of action.
Hanner at p. 3. The most important element that was pertinent in this case was the requirement that in order for res judicata to apply, the prior judgment must conclude the rights of the parties on the merits. The Hanner court cited the Tennessee Supreme Court decision of Garrett v. Corry Foam Products, Inc., 596 S.W.2d 808 (Tenn. 1980) which provided the following discussion about the “on the merits” requirement:
A party who asserts the defense of res judicata, or estoppel by judgment, has the burden of proving it and must show that the right in question was determined on the merits in the former judgment. And, if the judgment itself leaves the matter uncertain then it must be proved by other evidence.
An interesting argument was raised by the defendant in the Hanner case that res judicata should apply because the first case was actually involuntarily dismissed under Rule 41.02 of the Tennessee Rules of Civil Procedure. This rule provides as follows:
(1) For failure of the plaintiff to prosecute or to comply with these rules or any order of court, a defendant may move for dismissal of an action or of any claim against the defendant.
…
(3) Unless the court in its order for dismissal otherwise specifies, a dismissal under this subdivision and any dismissal not provided for in this Rule 41, other than a dismissal for lack of jurisdiction or for improper venue or for lack of an indispensable party, operates as an adjudication upon the merits.
(emphasis added). As a result, Rule 41.02(3) expressly provides that a dismissal under this provision "operates as an adjudication upon the merits" unless the court, in its order, specifies otherwise. Therefore, the defendant argued that this language compelled the application of the doctrine of res judicata because the dismissal was “on the merits.”
Ultimately, the Hanner court found that the dismissal of the first complaint was due to a procedural defect under Rule 11. As a result, the case was not decided on the merits and therefore the doctrine of res judicata did not apply to the second suit. The court really did not address the specifics of the defendant's argument that Rule 41.02(3) specifically labels an involuntary dismissal as an "adjudication upon the merits" unless the trial court specifically states otherwise. The court appeared to look past the language in the Rule and instead looked at the actual basis for the dismissal and found the basis was procedure in nature. As a result, the requirement for the adjudication to be “on the merits” was not met in this case and therefore the doctrine could not be applied.
In summary, this case is important because it shows that in order for the doctrine of res judicata to apply to bar a second cause of action, the first case must be decided “on the merits.” A dismissal due to a technical or procedural deficiency will not be sufficient to allow the doctrine of res judicata to dismiss the second cause of action.
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