Linda Bass v. Kevin J Peters
332217
| Mich. Ct. App. | Oct 26, 2017Background
- Defendants (Peters and law firm) represented Bass in post-divorce proceedings (parenting time/child support). After the matter ended, Bass did not pay an outstanding legal bill.
- Defendants sued Bass in 48th District Court on September 21, 2015, for the unpaid sum; Bass did not answer and the clerk entered a default and default judgment on November 20, 2015.
- On December 17, 2015, Bass filed a legal-malpractice claim in circuit court alleging failures in discovery, expert retention, and ill-advised settlement advice regarding nonmodifiable child support.
- Defendants moved to dismiss under MCR 2.116(C)(7), arguing res judicata barred Bass’s malpractice suit because she could have asserted it as a counterclaim in the district court collection action.
- The trial court granted dismissal on res judicata grounds; the Court of Appeals reversed and remanded, holding res judicata did not apply under these facts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether res judicata bars a former-client’s later malpractice suit when the lawyer previously obtained a default judgment in a collection action | Bass: not required to assert malpractice as counterclaim in collection action; may sue later | Defendants: Bass should have raised malpractice as counterclaim in district court; transactional test bars later suit | Court: Res judicata does not bar Bass’s malpractice claim; client may choose not to litigate malpractice in collection action (Leslie rule) |
| Whether Michigan’s transactional res judicata test overrides precedent allowing later malpractice suits after collection actions | Bass: long-standing precedent (Leslie) remains good law despite transactional test | Defendants: transactional test broadly requires raising all claims arising from same transaction | Court: Transactional test does not abrogate rule that a client sued for fees need not assert malpractice as a counterclaim; Leslie remains controlling |
| Whether policy purposes of res judicata (judicial economy, avoiding vexatious multiple suits, preventing inconsistent judgments) support preclusion here | Bass: none apply because collection action consumed virtually no judicial resources and did not adjudicate malpractice | Defendants: preclusion conserves resources and prevents piecemeal litigation | Court: Purposes do not apply—collection was clerk-entered default judgment; malpractice not litigated; no risk of inconsistency |
| Whether precedent like Sprague requires different outcome | Bass: Sprague distinguishable (contract/possession dispute vs. malpractice tort) and possibly inconsistent with other cases | Defendants: rely on Sprague and other cases applying transactional test | Court: Sprague is distinguishable and its application here is inappropriate; Schultz and Leslie support non-preclusion |
Key Cases Cited
- Sewell v. Clean Cut Mgmt., Inc., 463 Mich. 569 (res judicata elements and transactional view)
- Dart v. Dart, 460 Mich. 573 (res judicata framework)
- Adair v. State, 470 Mich. 105 (application of transactional test in unique Headlee context)
- Leslie v. Mollica, 236 Mich. 610 (rule: patient/client sued for fees need not plead malpractice as counterclaim; may bring later action)
- Goss v. Monroe Auto Equip. Co., 409 Mich. 147 (adoption of transactional test)
- Van Pembrook v. Zero Mfg. Co., 146 Mich. App. 87 (distinguishing payment/collection action from later tort claims requiring different proofs)
- Salem Indus., Inc. v. Mooney Process Equip. Co., 175 Mich. App. 213 (MCR 2.203 counterclaims are permissive, not compulsory)
- Bd. of Co. Rd. Comm’rs v. Schultz, 205 Mich. App. 371 (defense litigated earlier does not always preclude later affirmative claim)
- Sprague v. Buhagiar, 213 Mich. App. 310 (distinguished; contract/possession context)
- Brown v. Felsen, 442 U.S. 127 (res judicata invoked only after careful inquiry)
- Allen v. McCurry, 449 U.S. 90 (purposes of res judicata)