Dillаrd Land Investments, LLC, Duck Point, LLC, and Carl M. Drury III (collectively, “the Appellants”) brought an action against South Florida Investments, LLC, The Brand Banking Company, 1615 Johnson Road, LLC, HTSF Capital, LLC, and four individual defendants (collectively, “the Appellees”) asserting various causes of action related to the foreclosure of Dillard Land’s real property. The trial court granted the Appellees’ mоtion to dismiss the action on the ground that it was barred by res judicata under OCGA § 9-12-40 because the same claims had been subject to two prior voluntary dismissals, the second of which operated аs an adjudication upon the merits under OCGA § 9-11-41 (a) (3). But the record shows that the first voluntary dismissal was of an action brought by Dillard Land. The second voluntary dismissal, however, was of a counterclaim brought by Duck Point and Drury, and although they had sought to join Dillard Land as a plaintiff in the counterclaim, the trial court had not yet made Dillard Land a party when the counterclaim was
1. Facts and procedural history.
Duck Point and Dillard Land are limited liability companies manаged by Drury. On September 30, 2009, South Florida made a loan to Duck Point, secured by property owned by Duck Point and personally guaranteed by Drury. The purpose of this loan was to pay interest оn a loan from HTSF Capital to Dillard Land, which was secured by property owned by Dillard Land and was also personally guaranteed by Drury.
HTSF Capital assigned the Dillard Land loan to 1615 Johnson Road. In 2011,1615 Johnson Road sought to foreclose on the property securing that loan. In April 2011, Dillard Land brought an action against 1615 Johnson Road asserting that the advertisement of the foreclosure sаle contained mistakes and seeking a temporary restraining order and damages for breach of fiduciary duty. On May 3, 2011, Dillard Land voluntarily dismissed its action without prejudice.
Meanwhile, South Florida hаd brought an action against Duck Point and Drury on the loan it had made to Duck Point. In April 2011, Duck Point and Drury filed an answer that contained a counterclaim. The counterclaim purported to add Dillard Land to the action as a third-party counterclaim plaintiff and to add The Brand Banking Company, 1615 Johnson Road, and HTSF Capital as third-party counterclaim defendants. It appears, however, that Duck Point and Drury did not seek leave from the trial court to add any of these third parties to the action when they first filed the counterclaim. Likewise, Dillard Land did not seek leave from the court to intervene as a plaintiff in the counterclaim. Duck Point and Drury later moved the trial court for leave to amend the counterclaim to join Dillard Land as a counterclaim plaintiff. The trial court did not rule on that motion, and on June 13, 2011, Duck Point and Drury filed a voluntary dismissal without prejudice of their claims against The Brand Banking Company, 1615 Johnson Road, and HTSF Capital. Duсk Point and Drury subsequently withdrew their motion to join Dillard Land as a party to the counterclaim.
On June 14, 2011, Dillard Land, Duck Point and Drury brought the instant action. Therein, they alleged that the Appellees “conduсted a wrongful foreclosure of certain real property owned by Dillard Land and secured by Drury and Duck Point,” that South
The trial court granted the Appellees’ motion to dismiss on the ground that the action was barred under OCGA § 9-12-40. The trial court found, among other things, “that one or all of the [Appellants] filed claims and subsequently dismissed those claims [raised in the action] in two previous actions ... against one or all of the [Aрpellees] and/or their privies.” We review this ruling de novo. Dove v. Ty Cobb Healthcare Systems,
2. The dismissal of the counterclaim did not operate as res judicata because it was not an adjudication on the merits.
OCGA § 9-12-40 represents a codification of the common law doctrine of res judicata. Crowe v. Elder,
A judgment of a court of competent jurisdiction shall be conclusive between the same parties and their privies as to all matters put in issue or which under the rules of law might have been put in issue in the cause wherein the judgment was rendered until the judgment is reversed or set aside.
OCGA § 9-12-40. For this provision to aрply, however, the prior judgment must be an adjudication upon the merits. See Rafizadeh v. KR Snellville,
There are circumstances under which a voluntary dismissal by a plaintiff may operate as an adjudication uрon the merits. OCGA § 9-11-41 (a) addresses a plaintiff’s right to voluntarily dismiss an action and the effects of such a dismissal. OCGA § 9-11-41 (a) (1) (A) pertinently provides that “an action may be dismissed by the plaintiff, without order or permissiоn of the court. . . [b]y filing a written notice of dismissal at any time before the first witness is sworn[.]” And OCGA § 9-11-41 (a) (3) provides that a dismissal under subsection (a) “is without prejudice, except that the filing of a second notice of
For a second notice of dismissаl to operate as an adjudication upon the merits, however, it must have been filed by the same plaintiff who filed the first notice of dismissal. “The plain meaning of [OCGA § 9-11-41] is that a plaintiffs second voluntary dismissal of a case operates as an adjudication on the merits against the plaintiff.” (Citations omitted; emphasis supplied.) Troup v. Chambers,
Consequently, the trial court’s finding in this case that prior actions were filed and then dismissed by “one or all” of the Appellants is not determinativе. Rather, we must consider whether any of the Appellants was a plaintiff who voluntarily dismissed both actions. The record makes clear that the answer to this question is no.
Dillard Land was the only plaintiff in the action that resulted in the first voluntary dismissal, on May 3, 2011. But Dillard Land was not a party to the counterclaim that Duck Point and Drury voluntarily dismissed on June 13, 2011. Although Duck Point and Drury sought to join Dillard Land as a plaintiff to that counterclaim, the trial court had not yet ruled on their joinder motion or otherwise
The Appellees cite Zohoury v. Zohouri,
Given our determination that none of the Appellants voluntarily dismissed both actions, we need not consider the parties’ arguments regarding similarities between the claims in those actions and thе claims brought by the Appellants in the instant action. The voluntary dismissal of the prior counterclaim by Duck Point and Drury was not a second notice of dismissal and did not operate as an adjudication upon the merits under OCGA § 9-11-41 (a) (3), and consequently it had no preclusive effects upon the instant action under OCGA § 9-12-40. The trial court erred in dismissing the action under OCGA § 9-12-40. See Shy v. Faniel,
Judgment reversed.