Scrutinizing New Hampshire’s Exception to Res Judicata

Res judicata is a powerful tool for defendants in New Hampshire to defeat repetitive lawsuits brought by plaintiffs. Therefore, it is used to great effect as an affirmative defense in a motion to dismiss. New Hampshire case law recognizes that res judicata 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.” Kalil v. Town of Dummer Zoning Bd. of Adjustment, 159 N.H. 725, 730. (N.H. 2010). Res judicata is difficult to overcome, but a nuance in New Hampshire case law recognizes an exception to its preclusive effect, but the Court’s current view of the second element of res judicata and the present view of res judicata in general may have invalidated that exception.

The New Hampshire Supreme Court observed in Laconia National Bank v. Lavallee, 96 N.H. 353 (N.H. 1950), that in certain circumstances an issue in the present litigation is not precluded by res judicata if it is a different cause of action and it was not at issue and litigated in the prior action, or a matter in issue, and merely used as evidence, or a matter in evidence, in the prior trial. In other words, under Laconia, 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” defined by current New Hampshire jurisprudence. Under the writ system formerly employed by the New Hampshire courts, “cause of action” as enunciated under Laconia recognized the law/equity distinction and had a very narrow meaning such that 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 thereby by not allowing the plaintiff an opportunity to litigate it there.

The Court’s decision in Eastern Marine Const. Corp. v. First Southern Leasing, Ltd., 129 N.H. 270 (N.H. 1987) revisited the definition of “cause of action” to reflect the modern view that does not recognize the law/equity distinction that epitomized the narrow interpretation . Eastern Marine applies the present trend of “cause of action” that collectively refers to all theories on which relief could be claimed on the basis of the factual transaction in question regardless of whether they are in law or equity. In other words, 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” invalidates the exception to res judicata in Laconia because a plaintiff now has few if any excuses for not pleading all theories in a case with the same set of facts.

The Court last used Laconia in a published opinion inLineham v. Southern New England Production Credit Ass’n, 122 N.H. 179 (N.H. 1982) where the Court found the exception to res judicata applied. Notably, the Court has not taken up Laconia since Lineham in a published opinion, which means the Court 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., Case No. 2013-0448 (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 departed from Lineham and observed that the distinction between matters in issue and matters in evidence as applied in Laconia arise 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, which implies that the exception to res judicata in Laconia is now invalid. As a result, the next time the Court deals with Laconia in a published opinion it could overturn or at the very least refine its meaning. Whether the Court will wait for another case to come before it or produce an opinion sua sponte to address Laconia remains to be seen.

What does this mean for plaintiffs seeking to pull their case from the jaws of res judicata? The primary implication is that Laconia can no longer be relied upon to defeat the affirmative defense of res judicata, and practitioners should advise clients accordingly that res judicata may bar their complaint.  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.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s