[¶ 1] A. William Lucas appeals from a judgment dismissing his action against James E. Porter, Shelly Porter, Leonard W. Becker, First Wilton Bancshares, Ltd., and First State Bank of Wilton. Lucas argues the district court erred in deciding this action constituted the improper splitting of a cause of action. We hold Lucas’s prior action, Lucas I, and this action, Lucas II, arose out of the same facts and circumstances, and this action constitutes the improper splitting of a cause of action. We affirm.
I
[¶ 2] In
Lucas I,
Lucas initially sued James Porter, Bancshares, and First State Bank in a complaint dated December 11, 2003, regarding the sale of Bancshares’ stock and the ownership of First State Bank. Lucas subsequently amended his complaint to name only Bancshares and First State Bank as defendants. Lucas alleged Bancshares was created as a holding company to own stock in First State Bank; Lucas and James Porter each owned thirty percent and Becker owned forty percent of Bancshares’ stock; Lucas and James Porter had agreed to maintain equal ownership of Bancshares’ stock and made a joint written offer to purchase Becker’s shares of Bancshares, but James Porter later individually purchased Becker’s shares without Lucas’s knowledge; and James Porter thereafter used Banc-
[¶ 3] In October 2006, shortly before trial in Lucas I, Lucas sued James and Shelly Porter, Becker, Bancshares, and First State Bank in this action, Lucas II, alleging Lucas and James Porter offered to jointly purchase Becker’s stock in Banc-shares, but James Porter separately purchased Becker’s stock and James Porter thereafter voted his shares of stock of Bancshares in a manner that prevented Lucas from engaging in the management of Bancshares and First State Bank. Lucas claimed James Porter was “grossly mismanaging” First State Bank “to serve [Porter’s] own personal interests, including the oppression of [Lucas’s] shareholder rights.” Lucas’s complaint in Lucas II alleged: (1) a claim against James Porter for breach of a contract to purchase Becker’s Bancshares’ stock in equal shares; (2) claims against James Porter and Becker for breach of fiduciary duty, fraud, and tortious interference with Lucas’s contractual rights regarding the purchase of Becker’s stock; (3) a claim against James and Shelly Porter and Becker for oppression of a minority shareholder for freezing Lucas out as a minority shareholder of Bancshares and First State Bank; (4) claims against James Porter and Banc-shares for a constructive trust and for specific performance of the alleged agreement to equally purchase Becker’s Banc-shares’ stock; (5) a claim against James and Shelly Porter for conversion; (6) a claim against James Porter, Bancshares, and First State Bank for removal of James Porter as director and shareholder of First State Bank and Bancshares; (7) a claim against First State Bank and Bancshares for vicarious liability; (8) and claims against all the defendants for attorney’s fees, an accounting, and for recission of the transactions between James Porter and Becker.
[¶ 4] The Lucas I trial was held on October 18 and 19, 2006. On October 24, 2006, the Porters, Bancshares, and First State Bank moved to dismiss the Lucas II complaint, arguing the allegations in that action were identical or similar to Lucas I and arose out of the same facts and circumstances. They claimed the allegations in Lucas II constituted the improper splitting of a cause of action. Becker subsequently answered and also claimed Lucas II constituted the improper splitting of a cause of action.
[¶ 5] At an April 3, 2007, hearing on the defendants’ motion to dismiss
Lucas II,
the district court orally directed counsel for the defendants to prepare an order dismissing that action. On April 9, 2007, the court signed an order for judgment of dismissal of
Lucas II,
concluding it constituted an improper splitting of a cause of action under
Farmers Ins. Exch. v. Arlt,
[A]t this time it is not appropriate to make such a final determination since there is the other pending lawsuit [, Lucas II,] which is unresolved.... However, the Court reserves the right to consider such an equitable remedy after [Lucas II ] is resolved and upon proper motion being filed in this case by [Banc-shares] or a shareholder in [Bancshares] within 120 days after that case is finalized. If such motion is filed the Court would then consider in its discretion and after notice and hearing whether such an order would be fair and equitable to all parties under the circumstances.
[¶ 7] The Lucas I court refused to order the involuntarily dissolution of Banc-shares, but because Lucas had been unfairly prejudiced, the court found Lucas was entitled to other equitable relief, including:
A. The court’s reserved right to have Lucas bought out at a fair value as contemplated in [N.D.C.C. § 10 — 19.1— 115],
B. [Bancshares] shall distribute one share of common stock of [First State] Bank to Lucas.
C. While Lucas remains a shareholder of [Bancshares] he shall be permitted to vote at [First State] Bank Shareholder meetings his 30% of the 2,200 shares of Bank common stock held by [Banc-shares], less the one share distributed directly to Lucas as noted above.
D. While Lucas remains a shareholder of [Bancshares] he shall have all rights granted to shareholders in North Dakota as provided by North Dakota law, including cumulative voting, inspection of records, and the ability to bring direct and derivative actions.
E. The parties to this action are free to and encouraged by the Court to consider negotiating a mutually acceptable remedy other than noted by the Court in these conclusions of law which both parties mutually find will resolve the differences which presently exist between Lucas and the other shareholder, Porter, and [First State] Bank and [Banc-shares],
F. Lucas is awarded attorney’s fees against [Bancshares] in an amount to beapproved by the Court and is also awarded statutory costs and disbursements as provided by North Dakota law.
II
[¶8] Although the defendants moved to dismiss this action under N.D.R.Civ.P. 12, the defendants presented exhibits to the district court outside the pleadings in this action. Under N.D.R.Civ.P. 12(c) “[i]f, on a motion for judgment on the pleadings, matters outside the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment.” The district court did not explicitly exclude the defendants’ exhibits, and because the court received exhibits that were outside the pleadings in this action, we consider the issues raised in this appeal in the posture of summary judgment.
Witzke v. City of Bismarck,
Summary judgment is a procedural device for the prompt resolution of a controversy on the merits without a trial if there are no genuine issues of material fact or inferences that reasonably can be drawn from the undisputed facts, or if the only issues to be resolved are questions of law. A party moving for summary judgment must show there are no genuine issues of material fact and the case is appropriate for judgment as a matter of law. On appeal, we view the evidence in the light most favorable to the opposing party, and that party must be given the benefit of all favorable inferences. We review a district court’s decision to grant summary judgment de novo on the entire record.
III
[¶ 9] Lucas argues although Lucas I and Lucas II involve similar background facts, they have different operative facts, different parties, different law, different remedies, different causes of action arising at different times, and different issues. Lucas claims Lucas I was for the dissolution of Bancshares and Lucas II is for breach of fiduciary duties regarding his alleged agreement with James Porter to equally purchase Becker’s shares of Bane-shares. Lucas asserts the purpose of the rule against splitting a cause of action, the protection of a defendant, is not applicable to this case because the defendants in Lucas I and Lucas II are not the same. He claims he did not improperly split his cause of action and seeks a reversal and remand for trial of Lucas II, or for consolidation with Lucas I.
[¶ 10] A party with a single cause of action generally may not split that cause of action and maintain several lawsuits for different parts of the action.
Knaebel v. Heiner,
[¶ 11] In
Plott v. Kittelson,
“If the court, upon a consideration of the proof adduced, finds that another action is pending between the same parties and for the same cause, its judgment should be that the action abate * * *. But the defense of another action pending does not authorize a judgment on the merits of the case. Hence the court should not give a general judgment in favor of the defendant, nor a judgment that the plaintiff take nothing by his action. * * * ” jn words, if it appears from the showing made that there is another action pending, the action abates. If the other action is tried and judgment is entered, it is a bar to the subsequent action. If it is dismissed without prejudice, the abated action may be revived.
[¶ 12] In
Plott,
[¶ 13] In
Meagher v. Quale,
“The usual tests of identity of actions are whether a final judgment or decree in the one action would operate as a bar to the other; or whether the same evidence will support both actions. * * One test that is usually employed is whether a final judgment or decree in the prior action would be conclusive between the parties and operate as a bar to the second action; or, in other words, whether a final judgment or decree in the prior action, pleaded in abatement, would support a plea of res judicata of the issues involved in the second action.” 1 C.J.S., Abatement and Revival, § 42, b, p. 69.
“All courts agree that the cause of action must be the same in order that a pending suit abate one subsequently commenced, but difficulty is often encountered in determining whether the two causes are the same, and the authorities are not entirely harmonious. In many cases much the same test is used in determining what is the same cause of action for the purpose of abatement that is used in determining when a matter is res judicata. The ultimate inquiry seems to be whether the judgment in the first, if one is rendered, would be conclusive upon the parties in respect of the matters involved in the second. In other words, if a judgment in the first action would bar the other action, then the subsequent action will abate; but if such judgment would constitute no bar to the action, there is nothing to prevent the latter action from being maintained. Another test of identity is whether the same evidence will support both. Still another recognized test is whether the same full and adequate relief could be had in the prior action as in the one sought to be abated.” 1 Am.Jur., Abatement and Revival, Section 28, p. 35.
[¶ 15]
Meagher
supports the principle that a prior pending action may be pleaded as a bar to a subsequent action where a final judgment in the prior action, pleaded in abatement, would support the application of res judicata to the issues involved in the second action.
[¶ 16] Res judicata claim preclusion bars courts from relitigating claims in order to promote finality of judgments, which increases certainty, avoids multiple litigation, wasteful delay and expense, and ultimately conserves judicial resources.
Riverwood Commercial Park,
at ¶ 13;
Borsheim v. O & J Properties,
[¶ 17] In
Farmers Ins. Exch.,
In Brevick v. Cunard S.S. Co.,63 N.D. 210 , 213,247 N.W. 373 , 375, this court held that it is the act done “which gives the plaintiff his cause of action”. In Durham v. Spence, L.R. Exch. 46, cited in Brevick v. Cunard, S.S. Co., supra, the court says: “I understand by ‘cause of action’ that which creates the necessity for bringing the action.” In Harvey v. Parkersburg Insurance Co.,37 W.Va. 272 ,16 S.E. 580 , it is held: “ ‘Cause of action’ generally means the breach of duty”.
“A right of action at law arises from the existence of a primary right in the plaintiff and an invasion of that right by some act or omission on the part of the defendant. The facts which establish the existence of that right and its violation constitute the cause of action.”
This court has repeatedly held that a cause of action cannot be divided; that when there is a single cause of action, although there may be different kinds of damages, only one suit can be brought.
In Jacobson v. Mutual Ben. Health & Accident Ass’n,73 N.D. 108 ,11 N.W.2d 442 , 446, this court said:
“It is a familiar doctrine ‘that causes of action may not be divided, and that one who has availed himself of a part of a single claim or obligation in an action or defense is estopped thereafter from enforcing the remainder of it.’ In the later case it is said: ‘A party cannot in one action sue for a part of that to which he is entitled, and in a subsequent action sue for the remainder, when the right or recovery rests on the same state of facts.’ ”
The principle that causes of action cannot ordinarily be divided is also upheld in Albaugh v. Osborne-McMillan Elevator Co.,53 N.D. 113 ,205 N.W. 5 ; Reineke v. Commonwealth Ins. Co.,52 N.D. 324 ,202 N.W. 657 ; Hyyti v. Smith,67 N.D. 425 ,272 N.W. 747 .
[¶ 18] Under
Farmers Ins. Exch.,
[¶ 19] Lucas argues
Lucas I
involved dissolution of Bancshares, and relying on
Triple Five, Inc. v. Simon,
[¶20]
Lucas I
involved Lucas’s claim for involuntary dissolution of Bancshares, a closely-held corporation, under N.D.C.C. § 10-19.1-115, which provides a broad range of remedies for minority shareholders in closely-held corporations.
See Brandt v. Somerville,
[¶ 21] In
Lucas I,
Lucas initially named James Porter as a defendant. After amending the complaint, Lucas ultimately claimed Bancshares and First State Bank were acting through James Porter, and the underlying factual circumstances involving James Porter’s actions for the corporations were litigated in
Lucas I.
Although James Porter ultimately was not a named party in
Lucas I
and there is some difference in Lucas’s legal theories of recovery in
Lucas I
and
Lucas II,
Lucas’s claims in each action involve the same underlying common operative facts and alleged wrongful conduct by the corporations or its agents in buying Bancshares’ stock and effectively freezing Lucas out of his shareholder rights in the corporations. Lucas’s characterization of operative facts is another way of characterizing alternative legal theories or remedies for the same common nucleus of facts that established the existence of his rights in
Lucas I.
However, claim preclusion applies if the subsequent claims are based on the same underlying factual circumstances even if the subsequent claims are based on different legal remedies or theories.
See Riverwood,
[¶ 22] Lucas nevertheless argues
Lucas I
and
Lucas II
involve differ
“The strict rule that a judgment is operative, under the doctrine of res judi-cata, only in regard to parties and privies, is sometimes expanded to include as parties, or privies, a person who is not technically a party to a judgment, or in privity with him, but who is, nevertheless, connected with it by his interest in the prior litigation and by his right to participate therein, at least where such right is actively exercised by prosecution of the action, employment of counsel, control of the defense, filing of an answer, payment of expenses or costs of the action, the taking of an appeal, or the doing of such other acts as are generally done by parties.”
Fundamental fairness underlies the determination of privity. Ungar, at ¶ 12. A judgment on the merits exonerating a party from liability precludes a subsequent action against a party whose liability, if any is derivative of or secondary to the exonerated party. Id.
[¶ 23] Here, Bancshares and First State Bank were named defendants in both Lucas I and Lucas II, and Lucas’s claims against both corporate defendants in each action arose out of the same underlying factual circumstances for purposes of splitting a cause of action. James Porter was initially a named defendant in Lucas I, but Lucas subsequently amended his complaint to allege the corporate defendants in that action were acting through James Porter and Lucas’s claims against James Porter in this action are derivative of his claims against the corporations in Lucas I. Lucas’s claims against Shelly Porter in this action include oppression of a minority shareholder, conversion, attorney’s fees, an accounting, and recission of the transactions between James Porter and Becker. Those claims all involve allegations stemming from Shelly Porter’s involvement with the corporate defendants and are also derivative of Lucas’s claims against the corporations in Lucas I. In Lucas II, Lucas did not sue Becker for breach of a contract regarding Becker’s sale of Banc-shares’ stock to James Porter. Lucas’s claims against Becker in Lucas II alleged: (1) Becker breached a fiduciary duty regarding his duties as a shareholder, director, officer, and person in control of Bancshares and First State Bank; (2) Becker was guilty of fraud for failing to disclose information he was required to disclose by his fiduciary relationship with Lucas; (3) Becker tortiously interfered with Lucas’s contractual rights by breaching fiduciary agreements and duties to Lucas; (4) Becker breached fiduciary duties of good faith and fair dealing to Lucas, thereby entitling Lucas to rescind the stock sale and unwind the transactions; and (5) Becker oppressed a minority shareholder. Lucas’s claims against Becker in Lucas II arise out of the same factual circumstances as the claims in Lucas I and also are derivative of Lucas’s claims against the corporations in that action.
[¶ 24] We conclude Lucas’s claims against Becker and the Porters in this action arose out of the same underlying factual circumstances that established the existence of Lucas’s rights in
Lucas I
and are derivative of his claims against the corporations in
Lucas I.
Under these circumstances, we conclude there is a sufficient identity of common interests of the
[¶ 25] Lucas argues the defendants waived the defense of splitting a cause of action because they allowed Lucas I to proceed to trial before raising that defense in Lucas II.
[¶ 26] This Court has recognized that parties may agree or acquiesce to splitting a claim.
See Zueger v. Carlson,
[¶ 27] We conclude that, for purposes of splitting a cause of action, Lucas II arose from the same underlying operative facts that established the existence of Lucas’s rights in Lucas I and Lucas I has been tried on the merits. We therefore conclude the district court did not err in dismissing Lucas’s complaint in Lucas II.
IV
[¶ 28] Becker argues he is entitled to attorney’s fees and costs on appeal under N.D.R.App.P. 38, because Lucas’s appeal is frivolous. Under N.D.R.App.P. 38, if this Court determines an appeal is frivolous, “damages and single or double costs, including reasonable attorney’s fees” may be awarded. “An appeal is frivolous if it is flagrantly groundless, devoid of merit, or demonstrates persistence in the course of litigation which could be seen as evidence of bad faith.”
Witzke,
V
[¶ 29] We affirm the district court judgment.