184 A.3d 1121
R.I.2018Background
- Goodrow executed a 2003 mortgage on Newport property (MERS as nominee for E*Trade); mortgage later assigned to Bank of America (BOA).
- He alleges he made timely payments through 2011, but BOA increased his payment and then sent a default/acceleration notice in 2011; he disputed arrears and sought reconciliation without receiving a response.
- Goodrow claims BOA refused a June 2011 payment, began reporting negative credit information in May 2011, and foreclosure proceedings followed.
- In 2013 Goodrow sued EverBank, MERS, E*Trade, and BOA in federal court alleging mortgage-assignment defects, lack of standing to foreclose, fraud, failure to notify payment increase, and malicious credit reporting; federal court dismissed the complaint.
- In 2016 Goodrow filed a state-court complaint asserting breach of contract and breach of the covenant of good faith and fair dealing; defendants moved to dismiss on res judicata grounds and the Superior Court dismissed with prejudice.
- Goodrow appealed; the Rhode Island Supreme Court affirmed the dismissal, finding res judicata applicable and that the federal dismissal constituted a final judgment on the merits.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Superior Court erred by considering the federal dismissal order (conversion to summary judgment) | Goodrow: hearing justice improperly relied on documents outside the state complaint | Defendants: federal docket and dismissal order are part of the court record and may be considered | Court: permissible to consider prior court records/judicially noticeable documents; no improper conversion |
| Whether res judicata bars Goodrow’s 2016 state claims | Goodrow: the federal dismissal was not a final judgment on the merits and lacked subject-matter jurisdiction after finding no standing | Defendants: same parties and same transactional facts; federal dismissal precludes relitigation | Court: transactional identity of issues exists; federal dismissal (with prejudice) is a final adjudication; res judicata applies |
| Whether Goodrow could have raised breach-of-contract claims earlier | Goodrow: breach claims were based on servicing failures and weren’t properly before federal court | Defendants: plaintiff could and should have pleaded those claims in the first action | Court: plaintiff could have raised those claims in federal action; failure to do so bars them now under res judicata |
| Whether dismissal should be without prejudice due to procedural/ jurisdictional defects | Goodrow: dismissals for pleadings defects or lack of jurisdiction should not have preclusive effect | Defendants: federal Rule 41(b) presumes adjudication on the merits unless stated otherwise | Court: federal dismissal operates as an adjudication on the merits; dismissal with prejudice bars relitigation |
Key Cases Cited
- Federated Department Stores, Inc. v. Moitie, 452 U.S. 394 (1981) (final judgment precludes claims that were or could have been raised in prior action)
- DiPinto v. Sperling, 9 F.3d 2 (1st Cir. 1993) (dismissal with prejudice constitutes a final judgment on the merits)
- Chase v. Nationwide Mutual Fire Insurance Co., 160 A.3d 970 (R.I. 2017) (exceptions to the no-extrinsic-document rule on motions to dismiss)
- Curreri v. Saint, 126 A.3d 482 (R.I. 2015) (court may take judicial notice of court records and prior judgments for res judicata)
- Costello v. United States, 365 U.S. 265 (1961) (dismissals for certain procedural defects may not bar a later suit)