OPINION
{1} In this case we examine whether Jeffery Potter (Plaintiff) may bring a malpractice action against his former bankruptcy attorneys (Defendants) after Plaintiff objected to Defendants’ fee applications with allegations of malpractice and the bankruptcy court awarded fees in a final order. The district court dismissed the malpractice claim on the ground that it was barred by the principles of claim preclusion because Plaintiff did or could have brought the malpractice claim in response to Defendants’ fee applications. We agree that Plaintiffs claim is barred because the elements of claim preclusion are met, and Plaintiff had a full and fair opportunity to litigate the malpractice claim but failed to successfully do so. We affirm.
I. BACKGROUND
{2} With Defendant Chris Pierce as his lead attorney, Plaintiff filed for bankruptcy under Chapter 11 of the Federal Bankruptcy Code. The action was later converted to a Chapter 7 bankruptcy. During the proceedings, Plaintiff purchased at auction any malpractice and related claims he might have against Defendants.
{3} Pierce represented Plaintiff in the bankruptcy proceedings for approximately one year. Plaintiff also employed Martin Friedlander, a California attorney, to represent him in all matters other than the bankruptcy. Eventually, citing “a fundamental disagreement” with Plaintiff, Defendants, including Pierce, filed a motion to withdraw as Plaintiff’s counsel, which was granted. Defendants then filed two applications for attorney fees with the bankruptcy court.
{4} Before the fee application hearing, Plaintiff, acting pro se, filed objections to the fee application within which Plaintiff accused Defendants of malpractice. At the hearing, Plaintiff was represented by replacement counsel and Friedlander appeared at the hearing as a creditor. Pierce testified with respect to the fee applications, and Friedlander questioned Pierce about alleged failures in his representation of Plaintiff. Plaintiff elected not to cross-examine Pierce on any topic, including the pertinent basis on which he countered Defendants’ fee applications: Pierce’s malpractice. Following the hearing, the bankruptcy court allowed some fees, but disallowed others that the court concluded were premised on work that was duplicative, administrative, excessive, or not beneficial to the bankruptcy. The bankruptcy court made no express findings or conclusions related to Plaintiffs malpractice allegations. Plaintiffs bankruptcy was ultimately denied.
{5} Almost ten months following this denial, Plaintiff filed the malpractice claim that is the subject of this appeal. The district court granted Defendants’ motion for summary judgment on the ground that the claim was barred by claim preclusion
II. DISCUSSION
{6} On appeal, Plaintiff argues that the district court erred in concluding that his malpractice claim was precluded, and instead maintains that the court should have proceeded to the merits of the case. “Summary judgment is appropriate where there are no genuine issues of material fact and the movant is entitled to judgment as a matter of law. ... We review . . . legal questions de novo.” Self v. United Parcel Serv., Inc.,
A. The Elements of Claim Preclusion Have Been Satisfied
{7} In general, “[t]he purpose of our application of res judicata is to protect individuals from multiple lawsuits, to promote judicial economy, and to minimize the possibility of inconsistent judgments.” Moffat v. Branch,
{8} With regard to the third element, both New Mexico and the Court of Appeals for the Tenth Circuit have adopted the “transactional approach” set out in the Restatement (Second) ofJudgments §§ 24-25 (1982)fordetermining whether a later cause of action is the same as an earlier one. Petromanagement Corp.,
{9} Notably, claim preclusion applies only when “the claimant [has] had a full and fair opportunity to litigate the claim in the original action.” Moffat,
{10} At issue in this case is whether the district court correctly found that the elements of claim preclusion were satisfied. Under de novo review, we consider each element in turn. The first element of our analysis is whether there was a final judgment on the merits in the earlier proceedings. Rosette, Inc.,
{11} The second question in the claim preclusion analysis is whether the parties in the two suits are identical. Rosette, Inc.,
{12} Most vigorously disputed by the parties is whether the third element of claim preclusion was satisfied, i.e. whether the district court correctly determined that the dispute over attorney fees and malpractice in bankruptcy court was the “same claim” as Plaintiffs subsequent malpractice claim in state court. This particular fact pattern has yet to be addressed by New Mexico appellate courts. Nonetheless, we find helpful cases from the Courts of Appeals for the First, Fourth, Fifth, and D.C. Circuits, which addressed fact patterns congruent to the legally operative facts in this case, and found that claim preclusion bars malpractice claims following fee adjudications in bankruptcy court. See, e.g., Capitol Hill Grp. v.Pillsbury, Winthrop, Shaw, Pittman, LLC,
{13} In Grausz, the plaintiff filed for bankruptcy with the assistance of his counsel.
{14} The Court recognized that the bankruptcy code “necessarily included an inquiry by the bankruptcy court into the quality of professional services rendered by the [firm].” Id. at 473 (citing 11 U.S.C. § 330(a)(3) (2003)). “By granting [the] firm’s . . . fee application^], the bankruptcy court impliedly found that the firm’s services were acceptable throughout its representation of [the plaintiff].” Id. Having determined that the bankruptcy court had jurisdiction over the malpractice claim under 28 U.S.C. § 1334 (2005), because it “arose in” the bankruptcy case, the Court determined that “[procedural mechanisms were ... available [in bankruptcy court] for [the plaintiff] to raise his malpractice claim in connection with the fee proceeding” under Bankruptcy Rule 3007. Grausz,
{15} The same conclusion was reached by the First, Fifth, and D.C. Circuits. See In re Iannochino,
{16} Notably, in each of the aforementioned cases, each court found that the “identity of claims” element of the claim preclusion test was met because the questions presented to the bankruptcy court in a fee proceeding inherently involve an assessment of the quality of the professionals’ work similar to the assessment required in a malpractice action. See Capitol Hill Grp.,
{17} We likewise conclude that the cause of action within each proceeding at issue in this case arises from the same “nucleus of operative facts.” Rosette,
{18} We agree with the district court that the “practical considerations” addressed in Grausz and In re Intelogic Trace, Inc. also support preclusion of Plaintiff’s claim. See Grausz,
B. Computer One Does Not Bar Claim Preclusion in this Case
{19} Plaintiff makes several arguments as to why his malpractice claim should not be precluded. Plaintiff first argues that Computer One, Inc.,
{20} Our Supreme ■ Court in Computer One, Inc. relied on the same basic claim preclusion test stated above to conclude that the malpractice claim before it differed from the issues addressed in the charging lien that proceeded it. Notably, the Computer One Court assumed that the first two claim preclusion elements — a final order and identity of parties — were met. See
{21} In that case, Computer One filed suit against Sandia Corporation for breach of contract and misrepresentation. Computer One,
{22} Over a year later, Computer One filed a legal malpractice claim against the' Firm “arguing that the Firm had been negligent in the manner in which it had evaluated Computer One’s claims against Sandia [Corporation] and their potential settlement value.” Id. ¶ 8. The Firm moved for summary judgment on the ground that Computer One’s claims were barred because they were compulsory counterclaims to the Firm’s motion for a charging lien under Rule 1-013 (A) NMRA and because claim preclusion applied. Computer One, Inc.,
{23} Our Supreme Court reversed on both grounds. Id. ¶ 38. Relying on Bennett v. Kisluk,
{24} Indeed, “[t]he preclusive effect of Rule 1-013 (A) is premised on the formality of an opposing party, because that very status fairly alerts litigants that all claims and counterclaims arising out of the transaction or occurrence must be brought at one time under penalty of waiver.” Id. ¶ 24 (alteration, internal quotation marks, and citation omitted). Our Supreme Court held “one must first be a ‘party’ before one can be an ‘opposing party},]”’ and that “an attorney does not transform his former client into either, merely by taking steps to secure attorney fees in the same underlying proceeding.” Id. ¶ 25; see Bennett,
{25} Our Supreme Court next examined whether Computer One’s claim was barred by claim preclusion “[independent of any preclusive effects ofRule 1-013(A).” Id. ¶ 30; see Adams v. Key,
{26} Furthermore, the Court relied on the facts of that case to determine that even if Computer One could have raised the malpractice claim in the context of the charging lien motion, it “would not change our result in this particular case.” Id. ¶ 36. Because the Firm had “affirmatively acknowledg[ed] that the charging lien was not related to the malpractice claim, [it could not] change course and claim an opportunity for Computer One to do the very thing it urged Computer One not to do below.” Id.; see City of Sunland Park,
{27} Thus, Computer One, Inc. rests in part on claim preclusion and in part on principles of equity. It concluded that because the malpractice claim sought damages amounting to the difference between the actual settlement amount and the potential settlement had the Firm’s representation been more effective, rather than recovery of fees awarded, the malpractice claim was “distinct” from Computer One’s objections to the charging lien.
{28} In sum, contrary to Plaintiffs argument, Computer One, Inc. does not stand for the proposition that malpractice claims are never barred by adjudication of fee applications. Rather, we conclude that when a plaintiff actually argues or could have argued, or asserted but did not substantively pursue malpractice as a defense to a fee application or as a separate claim, claim preclusion may apply to bar later malpractice claims. As the district court noted, this holding is not inconsistent with federal law.
{29} Moreover, Computer One, Inc. is' specific to the facts and circumstances of that case. For instance, the Court grounded its holding in the context of charging liens. See id. ¶ 12 (“W e begin our discussion with . . . the history of attorney charging liens, because the resolution of the issue presented here becomes clear when the historical basis for the charging lien is considered.” (alteration, internal quotation marks, and citation omitted)). New Mexico cases have recognized that a charging lien “is a peculiar lien, to be enforced by peculiar methods.” Prichard v. Fulmer,
{30} Finally, Computer One, Inc. does not in any way address the preclusive effect of fee adjudications in bankruptcy court. The requirements and capabilities of bankruptcy courts make Computer One, Inc. inapposite in at least two ways. First, unlike analysis of charging liens, analysis of fee applications in bankruptcy proceedings “necessarily include [s] an inquiry . . . into the quality of professional services rendered.” Grausz,
{31} Computer One Inc.’ s only categorical statement is that a fee adjudication does not make an attorney and his or her client (or former client) into “opposing parties” such that malpractice claims related to the attorney’s representation of the client are compulsory under Rule 1-013(A) NMRA. Although Computer One, Inc. held that the plaintiffs malpractice claim was notbarred by claim preclusion, its holding was specific to the facts and circumstances of that case, and in our view, not a blanket directive regarding the preclusive effects of fee adjudications. We conclude that the present case is analogous to the federal cases we discussed above, and for reasons explained in the previous section of this Opinion, all of the elements of claim preclusion have been met. Computer One does not change the outcome of this case.
C. Plaintiff’s Remaining Arguments Regarding the Elements of Claim Preclusion Fail
{32} Plaintiff additionally argues that he could not have brought his malpractice claim at the time of the fee proceeding because at that juncture his bankruptcy petition had not yet been denied, citing Sharts v. Natelson,
{33} Plaintiff contends that the Sharts holding means that “a cause of action for legal malpractie can only exist when the plaintiff suffers damages.” While the Sharts Court held that “the ‘actual injury’ standard . . . accurately describes the nature of the harm the client must suffer before the statute of limitations begins to run[,]” it also stated that “the focus . . . should be on discovery of the fact of damage, not the amount.” Id. ¶¶ 11, 12 (internal quotation marks and citation omitted). The Court expressly rejected the position that a malpractice claim did not accrue “until [the client’s] rights were fixed by entry of [an] adverse .. .judgment.” Id. ¶ 14. It is clear here that Plaintiff had discovered the fact of his damage and knew before the fee proceedings that he might have a claim for malpractice. In fact, he alleged malpractice multiple times in his objections to the fee applications, asserting that Pierce had forged his signature on documents, failed to prosecute a suit, and facilitated a fraudulent conveyance. Plaintiff stated, “[t]he damages attributable to this malpractice greatly exceed the fees that [Defendants are] seeking in [the] [m]otion for [f]ees.” Thus, at the time of the fee proceedings Plaintiff was aware of both the conduct he later complained of and the potential impact of that conduct. See Grausz,
{34} Plaintiff also argues that the fact that he purchased the malpractice claim at auction militates against application of claim preclusion.
{35} Therefore, we conclude that all of the elements of claim preclusion have been satisfied and Plaintiff was sufficiently aware of the facts of his claim at the time of the fee adjudication such that preclusion of them in later proceedings is fair. We thus affirm the district court.
CONCLUSION
{36} For the foregoing reasons, we affirm the grant of summary judgment in favor of Defendants.
{37} IT IS SO ORDERED.
WE CONCUR:
Notes
We recognize that the term “res judicata” encompasses both claim and issue preclusion. See 18 Charles Alan Wright, Arthur R. Miller & Edward H. Cooper, Federal Practice & Procedure § 4402 (2d ed. 2002). We also acknowledge that New Mexico and federal cases sometimes use the terms “res judicata” and “claim preclusion” interchangeably. See, e.g., Petromanagement Corp. v. Acme-Thomas Joint Venture,
Rule 3007 of the Federal Rules of Bankruptcy Procedure was amended in 2007, altering the procedures related to adversary proceedings like fee applications. Fed. R. Bankr. P. 3007 advisory committee’s notes; Fed. R. Bankr. P. 7001 (defining claims that initiate adversary proceedings); 10 Collier on Banlcruptcy ¶700\.01 (Alan N. Resnick & Henry J. Sommer eds., 16th ed.); Fed. R. Bankr. P. 7042. Although the procedures under Rule 3007 have changed, the fundamental point in Grausz — that the bankruptcy court has mechanisms for adjudicating malpractice claims — remains true. See 9 Collier on Banlcruptcy ¶ 3007.02 (Alan N. Resnick & Henry J. Sommer eds., 16th ed.) (“The effect of the [amendment] in substitution for the predecessor language does not appear to be significant.”).
The parties here appear to agree that Plaintiffs claim was not a compulsory counterclaim to Defendants’ fee applications. We discuss this aspect of Computer One, Inc. in order to highlight the distinction between the application of Rule 1-013 (A) and claim preclusion principles.
The district court noted that “New Mexico has not ruled on the validity or invalidity of the assignment of a legal malpractice claim” and that it would “approachf] this case from the apparent perspective of the parties that the purchase at auction of the malpractice claims... was valid.” Since neither party challenges the validity of the sale on appeal, we too do not address that issue.