Nayak v. McNees Wallace & Nurick LLC, 700 F. App'x 172

Nayak sued his former attorneys (CGA Law Firm, Anne Zerbe, Zachary Nahass) after signing a termination agreement with employer Voith Turbo that provided leave through Dec. 31, 2013 and $10,000 toward fees; he alleged coercion, fraudulent alteration of the release, and a kickback to Zerbe.
The District Court dismissed Nayak's first complaint under Rule 12(b)(6) and for defective service; the Third Circuit affirmed dismissal on appeal (Nayak v. CGA Law Firm).
While that appeal was pending, Nayak filed a second suit adding Voith’s counsel (McNees Wallace & Nurrick and Brian Jackson) and reasserting state-law claims (tortious interference, intentional misrepresentation, civil conspiracy, contract fraud, third-party beneficiary breach, etc.).
Defendants moved to dismiss: CGA defendants invoked res judicata based on the prior final judgment; McNees defendants argued the signed Release barred the state-law claims and moved under Rule 12(b)(6).
The Magistrate Judge recommended dismissal; the District Court adopted the recommendation and dismissed the complaint with prejudice. Nayak appealed; the Third Circuit affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether res judicata bars claims against CGA	Nayak argued prior judgment was void for lack of personal jurisdiction because of untimely service	CGA argued final judgment was valid and the new claims arise from the same underlying events	Court held prior judgment was valid; res judicata bars the repeated claims against CGA
Whether the Release bars claims against McNees	Nayak argued McNees were not parties to the Release and Release did not cover his state-law claims	McNees argued the Release unambiguously covered the company’s attorneys and all waivable claims, including common-law claims	Court held the Release clearly included Voith’s attorneys and waived all waivable claims, so McNees’ dismissal was proper
Whether Release is voidable for fraud, duress, mistake, or accident	Nayak alleged coercion, emotional stress, unilateral misunderstanding, and fraudulent alteration by Zerbe	Defendants argued no pleaded facts or legal authority to show fraud, duress, mistake, or accident; signed release is presumptively binding	Court held Nayak failed to plead facts to invalidate the Release; mere stress or unilateral misunderstanding insufficient
Whether leave to amend should be granted	Nayak sought leave to amend and factual development before dismissal	Defendants argued claims are barred or futile; dismissal on the pleadings appropriate	Court held amendment would be futile; dismissal with prejudice affirmed

Elkadrawy v. Vanguard Group, Inc., 584 F.3d 169 (3d Cir. 2009) (res judicata standard for claim preclusion)
Lubrizol Corp. v. Exxon Corp., 929 F.2d 960 (3d Cir. 1991) (elements of claim preclusion)
Montana v. United States, 440 U.S. 147 (1979) (policies justifying claim preclusion)
United States v. Athlone Industries, Inc., 746 F.2d 977 (3d Cir. 1984) (assessing identity of causes of action)
Bradley v. Pittsburgh Bd. of Education, 913 F.2d 1064 (3d Cir. 1990) (res judicata bars claims that could have been asserted)
Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007) (plausibility pleading standard under Rule 12(b)(6))
Three Rivers Motors Co. v. Ford Motor Co., 522 F.2d 885 (3d Cir. 1975) (signed release binding absent fraud, duress, accident, or mutual mistake)
Grayson v. Mayview State Hospital, 293 F.3d 103 (3d Cir. 2002) (leave to amend may be denied as futile)
Securacomm Consulting, Inc. v. Securacom, Inc., 224 F.3d 273 (3d Cir. 2000) (displeasure with rulings does not establish judicial bias)
Evans v. Marks, 218 A.2d 802 (Pa. 1966) (interpretation of releases governed by parties’ intent as expressed in the release)