ROGERS v COLONIAL FEDERAL SAVINGS & LOAN ASSOCIATION OF GROSSE POINTE WOODS
Docket No. 58657
Supreme Court of Michigan
Decided February 8, 1979
Rehearing granted 406 Mich 1121
405 Mich 607
Argued November 2, 1977 (Calendar No. 3). Order dismissing appeal post, p 637.
The defendant, by operation of GCR 1963, 203.1, has waived any res judicata defenses it may have had as a result of its failure to make timely objection in the original suit.
Justice Williams, who was joined by Justices Levin and Blair Moody, Jr., wrote for reversal:
1. The doctrine of res judicata recognizes that endless litigation leads to vexation, confusion and chaos for the litigants, and inefficient use of judicial time. The rule has been stated in more than one way, but, whatever the correct scope of the rule may be, its main purpose is to insure finality in a cause of action.
2. The first sentence of GCR 1963, 203.1 codifies the longstanding decisional rule against splitting a cause of action. That rule is grounded on the same general policy considera-
REFERENCES FOR POINTS IN HEADNOTES
[1, 8, 10] 46 Am Jur 2d, Judgments § 394 et seq.
[2] 46 Am Jur 2d, Judgments § 406.
[3, 5-7, 13, 14] 46 Am Jur 2d, Judgments §§ 445, 585.
[4, 9] 46 Am Jur 2d, Judgments §§ 390-394, 470.
[11] 46 Am Jur 2d, Judgments §§ 405, 474, 476, 487.
[12] 46 Am Jur 2d, Judgments § 479.
3. The court rule specifically states that failure to object to a failure to join claims required to be joined constitutes a waiver of the required joinder rules. The language is clear. Its obvious effect is that the implied waiver by the defendant precludes an assertion of the waived defense in a subsequent suit. The defenses of merger and bar have always been subject to waiver by the defendant. The only change of the common law in the court rule is that the defendant‘s objection must be asserted during the first suit, which mitigates the harshness of the prior common-law rule by requiring the objection when the plaintiff has an opportunity to cure the defect of the failure to join.
4. The court rule, in the first clause of the second sentence, unequivocally waives all joinders, whether the plaintiff won or lost the prior action. The language of the second clause of that sentence is subordinate to that of the first clause. The term “merger” is used in its general sense, rather than to limit the application of the court rule to a “merger” (where the prior judgment was for the plaintiff). Waiver of the joinder rules necessarily includes waiver of the defense of “bar” (where the prior judgment was against the plaintiff). The primary purpose of the waiver provision is to encourage the defendant to assert, by motion, an objection when the defect can be cured. However, at that time it could not be known whether the plaintiff would win or lose. If the waiver provision were solely applied to actions which, once litigated, came within the technical definition of merger, the certainty which the rule intended would be frustrated because there would be no certainty until the plaintiff‘s success in the original action was determined. If a choice had been intended in applying the rule it would appear far more logical to assist the plaintiff who suffered the most under the traditional compulsory joinder rule, i.e., the plaintiff who has been unsuccessful in the original action and therefore recovered nothing from the defendant. Therefore, the waiver provision of the court rule means what it says. A defendant who fails to object to a plaintiff‘s failure to join additional claims waives the use of the defense in a subsequent action based on the additional claims.
Justice Kavanagh concurred in the result but would rest the decision solely on the court rule. The central concern of the court rule is simply whether the plaintiff has split a cause of action and whether the defendant has objected. The outcome of the first suit is irrelevant. There was no objection by the defendant here; therefore it has waived any res judicata de-
Reversed and remanded for trial.
Justice Ryan, with Chief Justice Coleman and Justice Fitzgerald, voted to affirm on the ground that while the court rule affords the successful plaintiff some relief from the harsh effects of the merger doctrine, an unsuccessful party who has litigated a portion of a cause of action to a final adjudication should continue to have further claims arising out of the same cause of action barred by the judgment.
1. Under traditional notions of res judicata, a final valid judgment taken in a case terminates all litigation between the parties on the cause of action sued upon. Where a judgment is rendered in favor of the plaintiff the cause of action upon which the judgment is based is said to be merged in the judgment and the plaintiff cannot thereafter maintain another action on the original cause of action; if the judgment is rendered in favor of the defendant on the merits, the original cause of action is barred by the judgment. A party may not split a cause of action by dividing a single or indivisible cause of action into several claims or demands and bringing several actions on them. Rules of res judicata operate to require a party to bring forth all the grounds and theories available to support the cause of action or be barred from raising them in a subsequent suit.
2. The plaintiff in this case had improperly split a single cause of action and, in consequence, this suit is barred by application of the res judicata rule. The first cause of action against the defendant for cancellation of the mortgage lien arose out of a single transaction or occasion, the plaintiff‘s plan to finance repairs to her home. The plaintiff claimed entitlement to cancellation of the mortgage which she alleged had been fraudulently executed by the defendant‘s codefendant in that action. Defendant Colonial denied any knowledge of any wrongful or fraudulent conduct by its codefendant. In this action the plaintiff again seeks cancellation of the mortgage on a theory that defendant Colonial knew of its former codefendant‘s failure to make certain disclosures under the Federal truth-in-lending act. The plaintiff has thereby split her single or indivisible cause of action into two claims by advancing alternate grounds or theories for relief. The judgment by agreement of the parties dismissing the first action with prejudice operates as a final adjudication on the merits. Under traditional res judicata principles this subsequent action would be barred. The language of the “waiver provision” of the court
3. There can be no merger of a subsequent claim into a prior judgment unless the claimant prevailed in the prior case and obtained a judgment into which the cause of action can merge. Merger is the label traditionally assigned to describe the result which obtains when a claimant, usually but not always a plaintiff, splits a cause of action and prevails in the first suit. Bar is the label traditionally assigned to the situation in which a claimant who has split a cause of action and suffered an adverse judgment in the first suit is foreclosed from bringing a subsequent suit upon the same cause of action for the remainder of his claim. The plaintiff‘s truth-in-lending claim did not merge into the judgment entered in the first case, not because of the waiver provisions of the court rule but because, although she indeed split her cause of action, she did not prevail.
4. In the language of the traditional res judicata doctrine, the plaintiff‘s subsequent suit seeking recovery on alternate grounds is barred by the prior determination on the merits in defendant Colonial‘s favor. The drafters of the court rule chose to use the merger language of the traditional res judicata doctrine for a particular reason. The language of the rule does not refer to bar and one should be hesitant to conclude that the drafters sought to work a sweeping change of that doctrine without even alluding to it. On the contrary, the drafters sought to provide relief from harshness in a narrow category of cases and did not intend to create a situation in which claimants who suffer an adverse judgment on those claims first advanced can hold back alternate grounds and theories for later use and then proceed upon them if another theory has failed. If that were permitted in this case, and the plaintiff were allowed to proceed upon her instant claim and lose, she could sue Colonial still again, alleging knowledge of lack of delivery of the deed, or incompetency, or some other theory. In summary, an unsuccessful party may not bring a series of successive suits raising claims arising out of a single transaction or occurrence by each time alleging some variation in the facts and corresponding legal theory.
OPINION OF THE COURT
1. JUDGMENT — RES JUDICATA.
Res judicata has been framed in two distinct manners, as a literal
2. JUDGMENT — JOINDER OF CLAIMS — COURT RULES.
The court rule requiring the joinder of every claim arising out of the transaction or occurrence which is the subject matter of an action codifies the longstanding decisional rule against splitting a cause of action; to the extent the rule encompasses or mitigates res judicata, it must control (
3. JUDGMENT — JOINDER OF CLAIMS — WAIVER — COURT RULES.
The language of the court rule on required joinder of claims that failure to object to a failure to join constitutes a waiver of required joinder is clear, and its obvious effect is that waiver by the defendant precludes later assertion of the waived defense during a subsequent suit (
4. JUDGMENT — JOINDER OF CLAIMS — MERGER — BAR — WAIVER — COURT RULES.
The defenses of merger and bar have always been waivable by the defendant; the only innovative aspect of the waiver provision of the court rule on required joinder of claims is that a defendant must now assert an objection to failure to join during the first suit, when the plaintiff has an opportunity to cure the defect (
5. JUDGMENT — JOINDER OF CLAIMS — WAIVER — COURT RULES.
The language of the court rule on required joinder of claims that “failure * * * to object * * * constitutes a waiver of the required joinder rules” unequivocally waives all joinders, whether the plaintiff won or lost, so that the technical difference between merger and bar does not come into play at all (
6. JUDGMENT — JOINDER OF CLAIMS — WAIVER — COURT RULES.
The primary purpose of the waiver provision of the court rule on required joinder of claims is to encourage a defendant to assert, by motion, an objection to the plaintiff‘s nonjoinder of claims in the first suit when the defect can be cured; to apply the provision solely to merger and not to bar would defeat its purpose because there could be no certainty whether there would be merger until the plaintiff‘s success was determined, after rather than during the first suit (
7. JUDGMENT — JOINDER OF CLAIMS — WAIVER — COURT RULES.
The central concern of the court rule on required joinder of claims is whether the plaintiff has split a cause of action and whether the defendant has objected, and the outcome of the first suit is irrelevant; a defendant who has not objected to failure to join in the first suit has waived any res judicata defenses in a later suit, and discussion of the doctrine of res judicata is unnecessary (
DISSENTING OPINION BY RYAN, J.
8. JUDGMENT — RES JUDICATA — CAUSE OF ACTION.
Under traditional notions of res judicata, a final valid judgment taken in a case terminates all litigation between the parties on the cause of action sued upon; “cause of action” has been defined broadly as all claims against the defendant arising out of the same transaction or occurrence.
9. JUDGMENT — MERGER — BAR.
A judgment in favor of the plaintiff merges the cause of action sued upon in the judgment and the plaintiff cannot thereafter maintain another action on the original cause of action; a judgment in favor of the defendant on the merits bars the original cause of action.
10. JUDGMENT — RES JUDICATA.
Rules of res judicata operate to require a party to bring forth all of the grounds and theories available to support a cause of action or be barred from raising them in a subsequent suit.
11. ACTION — MORTGAGES — CANCELLATION — SPLITTING CAUSE OF ACTION.
A plaintiff seeking cancellation of a mortgage lien against her home had a single cause of action which arose out of a single transaction or occasion, her scheme to finance repairs to her home, and split her cause of action when she brought a first action for cancellation in which the mortgage lender was a defendant, in which she alleged no wrongdoing on the lender‘s part but claimed entitlement to cancellation because the mortgage had been fraudulently executed by a codefendant, and then a second action for cancellation on the theory that the lender had knowledge of the codefendant‘s failure to make certain disclosures under the Federal Truth-in-Lending act.
12. DISMISSAL AND NONSUIT — JUDGMENT — BAR.
A dismissal of an action with prejudice operates as an adjudication on the merits and will bar a subsequent action on the same matter.
13. JUDGMENT — JOINDER OF CLAIMS — WAIVER — COURT RULES.
The waiver provision of the court rule on required joinder of claims was intended to preclude in certain cases the merger into a prior judgment of claims not actually litigated although arising out of the same cause of action; it is merger which is precluded by the waiver provision, not bar; the drafters of the rule chose to use the merger language of the traditional res judicata doctrine for a particular reason, to provide relief from the harshness of the doctrine of merger (
14. JUDGMENT — JOINDER OF CLAIMS — BAR — COURT RULES.
A second lawsuit by a plaintiff seeking recovery against a defendant on alternate grounds after the first lawsuit was dismissed as to the defendant with prejudice is a splitting of the plaintiff‘s cause of action which is barred by the prior determination on the merits in the defendant‘s favor, and the waiver provision of the court rule requiring joinder of claims does not apply to it (
Thomas J. Guyer for plaintiff.
Fischer, Franklin & Ford (by George Hogg, Jr., and Francis E. Bentley) for defendant.
WILLIAMS, J. The sole issue on which this Court granted leave to appeal is whether a voluntary dismissal with prejudice of a prior suit which failed to state a cause of action under state law precludes, under the doctrine of res judicata and/or
We find that plaintiff is not so precluded.
I. FACTS
In 1972, plaintiff deeded her home to Louis Tibolla as security in connection with an agree-
In September, 1972, Tibolla granted a mortgage to defendant Colonial Federal Savings and Loan Association of Grosse Pointe Woods (hereinafter Colonial), gave a personal note as well as a security interest in the property, and received from Colonial $15,000.
Later in 1972 plaintiff filed her initial lawsuit against Tibolla alleging that he had breached his contract of repair, committed fraud, used second-hand materials, made shoddy repairs and failed to apply half the proceeds of the land contract to pay off the mortgage. By amended complaint, plaintiff joined Colonial as a party and sought rescission of the mortgage between Tibolla and Colonial. Colonial denied that it was a party to any wrongful conduct and, at pretrial conference, January 8, 1975, plaintiff‘s attorney in the first case agreed to a dismissal of Colonial with prejudice. At the same time a default judgment was entered against Tibolla for the full amount of plaintiff‘s claim, $17,100, together with costs, interest and attorney‘s fees.
Nine days later plaintiff filed the instant suit against Colonial, seeking rescission of the mortgage based on a claim that violation of the Federal Truth-in-Lending Act,
Appeal was taken by plaintiff to the Court of Appeals which affirmed by memorandum opinion of June 22, 1976. Plaintiff filed an application for leave to appeal to this Court and leave was granted March 7, 1977.
II. RES JUDICATA
Res judicata is a manifestation of the recognition that endless litigation leads to vexation, confusion and chaos for the litigants, and inefficient use of judicial time. See generally 46 Am Jur 2d, Judgments, § 395, p 559. The scope of res judicata has been framed in this jurisdiction in two distinct manners, one of which is literal and narrow and the other of which is broad. The former literal statement of the rule appears in the case of Clements v Constantine, 344 Mich 446; 73 NW2d 889 (1955). In that case the scope of the doctrine was set forth as follows:
“The first essential of the rule of res judicata is the identity of the matter in issue. The ‘matter in issue’ is defined to be ‘that matter upon which the plaintiff
proceeds by his action, and which the defendant controverts by his pleadings.’ See Chand, Res Judicata, p 35. If the same subject matter comes in question in a second action in a court of last resort, it is bound by its own former decision. Bigelow on Estoppel (1st ed), p 16.
“’ “A matter or question, either of law or fact, is res judicata, or set at rest, as to adverse parties and their respective privies, if it was a material issue in the proceeding, directly involved, and not merely incidentally cognizable nor collaterally in question, and was adjudicated after a contest, by a final judgment on the merits.” 1 Van Fleet, Res Judicata, p 2.’ ” Clements, supra, 453-454. (Emphasis added.)
Literally res judicata means “[a] matter adjudged” and is further defined by Black‘s Law Dictionary (4th ed) as a “[r]ule that final judgment or decree on merits * * * is conclusive of rights of parties or their privies in all later suits on points and matters determined in former suit” (emphasis added). What clearly stands out in these definitions is that issues not litigated in a former suit are not res judicata.
However, the rule has also been framed more broadly. An example of this more inclusive statement of the doctrine can be found in three cases which deal with the res judicata of prior consent judgments, Gursten v Kenney, 375 Mich 330; 134 NW2d 764 (1965); Shank v Castle, 357 Mich 290, 295; 98 NW2d 579 (1959); Prawdzik v Heidema Brothers, Inc, 352 Mich 102; 89 NW2d 523 (1958). In Gursten the rule was stated in dicta as follows,
” ‘The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have
brought forward at the time.’ ” Gursten, p 335.2 (Emphasis added.)
Whatever the correct scope of the rule, its main purpose is to insure finality in a cause of action. Plaintiff asserts that the cause of action she presently sues upon is different, separate and distinct from that in the prior suit, thereby precluding application of res judicata, and even if this were not the case, her second suit is saved by virtue of the waiver provision of
Because we find this case controlled by
“A complaint shall state as a claim every claim
either legal or equitable which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject-matter of the action and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. Failure by motion or at the pretrial conference to object to improper joinder of claims or to a failure to join claims required to be joined constitutes a waiver of the required joinder rules and the judgment shall not merge more than the claims actually litigated.” (Emphasis added.)
The first sentence of the above court rule codifies Michigan‘s longstanding decisional rule against splitting a cause of action. That decisional rule is grounded on the same general policy considerations as the doctrine of res judicata and, to the extent the rule encompasses or mitigates res judicata, it must control.4
III. GCR 203.1
In examining the instant case under
In Malesev v Garavaglia, 12 Mich App 282; 162 NW2d 844 (1968), Justice THOMAS GILES KAVANAGH, then Presiding Judge of the Court of Appeals, was faced with a case similar to the instant one. Plaintiffs had initially brought a tort action to recover property damage suffered during defendants’ construction of a drain water intake system pursuant to a contract with the Wayne County Board of Road Commissioners. Defendants were awarded an accelerated judgment based on plaintiffs’ failure to comply with the three-year statute of limitations governing personal injury or property damage claims. Less than two months later the plaintiffs brought a second, separate action against the same defendants claiming they were third-party beneficiaries under the contract between the road commission and defendants and that defendants had breached that contract. Unlike their initial suit, plaintiffs’ second suit sounding in contract was subject to a six-year rather than three-year statute of limitations.
Defendants were granted an accelerated judgment in the second suit based on res judicata. On appeal, then Presiding Judge KAVANAGH correctly found the application of res judicata to be erroneous, given the circumstance that plaintiffs had not received an adjudication on the merits of any portion of their claim.5 Further, in light of
We find that the rule was interpreted and applied in the only logical manner by then Presiding Judge KAVANAGH in Malesev. As quoted above, the language of the rule specifically states that “failure * * * to object * * * to a failure to join claims required to be joined constitutes a waiver of the required joinder rules“. This language is clear. Its obvious impact is that waiver by the defendant precludes later assertion of the waived defense during a subsequent suit.7
While at first glance the court rule‘s waiver provision may appear to create a vast change in
IV. “MERGER“/“BAR” AND GCR 203.1
Justice RYAN‘s opinion, in its interpretation of the instant case, would limit the scope of
Under such an interpretation, if a plaintiff had won a prior suit during which a defendant had failed to object to plaintiff‘s nonjoinder,
First, Justice RYAN‘s interpretation would mean that Malesev, which we believe correctly interpreted and applied
Second, we note that the concepts of merger and bar are almost identical despite their technical distinction.9 In fact the terms “merger” and “bar” are often used interchangeably to convey the same meaning. In specific reference to the waiver provision of
“failure * * * to object to * * * failure to join claims required to be joined, constitutes a waiver of the required joinder, and the judgment does not merge more than the claims actually litigated.” (Emphasis added.)
In the very next section, § 8.104, the treatise states,
“[a]s pointed out in the previous section, § 8.103, failure to object to the nonjoinder of mandatory claims
means that the action does not bar a subsequent suit on that unjoined claim.”10 (Emphasis added.)
The fact that the terms are frequently not distinguished in common usage is further demonstrated by the fact that this limited interpretation of the waiver provision solely to those cases falling within the technical definition of merger has not arisen in prior Court of Appeals cases examining
Third, even if merger is given its technical meaning, we do not find the language discussing merger to control that which precedes it. The second sentence of
Further, and perhaps of greatest significance, to apply the
The introduction of fairness and certainty into this area of litigation is the obvious beneficial impact intended by the rule in requiring assertion in the first suit. For example, if a plaintiff initially fails to join all claims and there is no objection made by defendant to this defect, then all parties are on express notice that plaintiff may later institute suit on matters not actually litigated therein. Conversely, if plaintiff fails to join all claims and defendant does object, all parties know that plaintiff will be precluded from suing again absent an amendment in plaintiff‘s complaint joining those additional claims. Hence, as stated in the Committee Notes and Authors’ Comments, the unfairness or harshness of the joinder rule is mitigated by bringing the matter to the fore in the original suit when the nonjoinder defect can be cured.
Clearly, if the waiver provision were solely applied to cases which, once litigated, came within the technical definition of “merger“, there could be no certainty until plaintiff‘s success was determined; that very certainty sought to be realized by the rule during the original suit would be frustrated.13 We cannot and do not find that this rule drafted to effectuate fairness and certainty during an original action, can be interpreted to render
Finally, the unreasonableness of interpreting the waiver provision as restricted only to cases falling within the technical definition of “merger” is further supported by the fact that we cannot logically find that the provision was intended to avoid harshness only with respect to the successful plaintiff. If a choice had been undertaken by the rule — and we do not find that one was — it would appear to us far more logical to assist the plaintiff suffering most significantly by the harshness of the traditional compulsory joinder requirement, i.e., the plaintiff who has been unsuccessful and therefore recovered nothing from the defendant as a result of the original suit.
For the above reasons we cannot conclude that the
V. CONCLUSION
Consistent with the purpose and language of the rule, we find that defendant has waived the right to preclude the instant suit as a result of its failure to make timely objection in the original suit. Accordingly, we reverse and remand for trial on plaintiff‘s Federal Truth-in-Lending claim.
Costs to appellant.
LEVIN and BLAIR MOODY, JR., JJ., concurred with WILLIAMS, J.
RYAN, J. We granted plaintiff Blanche Rogers’ application for leave to appeal to review the trial court‘s decision to grant accelerated judgment in favor of Colonial Federal Savings & Loan Association of Grosse Pointe Woods’ (Colonial) motion for accelerated judgment on the basis of res judicata. We are required to determine not only the applicability of the res judicata doctrine to the facts of this case, but the effect, if any, upon that doctrine of
I
On or about May 17, 1972, Ms. Rogers conveyed her home to one Louis Tibolla by warranty deed. In September of 1972, Tibolla mortgaged the home to Colonial as security for a loan of $15,000.
Later that year, Ms. Rogers filed suit against Tibolla and joined Colonial as a party. The final amended complaint in the suit alleged that Ms. Rogers had contracted with Tibolla to repair some fire damage to her home and that the repairs were to be financed under the contract by Ms. Rogers giving a warranty deed to Tibolla in exchange for a land contract under which she would repurchase
Ms. Rogers’ complaint prayed that the deed, land contract and mortgage be set aside on the grounds that the repairs were not made in compliance with the agreement to repair, resulting in a failure of consideration. No wrongful conduct on the part of Colonial was alleged.
In its answer to the suit, Colonial denied being a party to the repair agreement or to any fraudulent conduct and, by way of affirmative defense, asserted that it was without “any knowledge of any wrongful or fraudulent conduct on the part of defendant” and that it had acted in good faith reliance upon Tibolla‘s record title and authority under the land contract to mortgage the property.
The suit was concluded on January 8, 1975, when Rogers obtained a default judgment against Tibolla and agreed to a dismissal “with prejudice” as to Colonial. Tibolla thereafter apparently left the jurisdiction, leaving the plaintiff‘s judgment unsatisfied.
Ms. Rogers filed the instant suit nine days later, alleging that the transaction with Tibolla was subject to the Federal Truth-in-Lending Act,1 that Tibolla failed to make the disclosures required by that act, and that Rogers had a statutory right to rescind the agreement with him and recover the security. She alleged that Colonial knew that the act applied to the transaction and that the required disclosures were never made and prayed that Colonial‘s interest in the premises be declared void.
Colonial moved for accelerated judgment pursuant to the provisions of
We would affirm.
II
Under traditional notions of res judicata, a final valid judgment taken in a case terminates all litigation between the parties on the cause of action sued upon. Where a judgment is rendered in favor of the plaintiff the cause of action upon which the judgment is based is said to be merged in the judgment and the plaintiff cannot thereafter maintain another action on the original cause of action. If the judgment is rendered in favor of the defendant on the merits, the original cause of action is barred by the judgment.3 Clements v Constantine, 344 Mich 446; 73 NW2d 889 (1955); Restatement Judgments, §§ 47, 48, pp 181, 191. The term “cause of action” has been defined rather broadly in terms of all claims against the defendant arising out of the same transaction or occurrence.4
The rule against splitting may therefore, through the doctrine of merger, operate to prevent a plaintiff, who has successfully litigated to completion part of a cause of action, from seeking complete recovery by maintaining successive actions on the unlitigated claims. See, e.g., Arnold v Masonic Country Club, 268 Mich 430; 256 NW 472 (1934).
Analogously, and more fundamentally, rules of res judicata operate to require a party to bring forth all of the grounds and theories available to support the cause of action or be barred from raising them in a subsequent suit. We have repeatedly applied our holding that:
“The plea of res judicata applies, except in special cases, not only to points upon which the court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time.” Harrington v Huff & Mitchell Co, 155 Mich 139, 142; 118 NW 924 (1908) quoting from Henderson v Henderson, 3 Hare 100, 115 (67 Eng Rep 313).
Where, however, a subsequent suit asserts a different cause of action it will not be barred by a prior judgment. Clements v Constantine, supra; Hewett Grocery Co v Biddle Purchasing Co, 289 Mich 225; 286 NW 221 (1939); Creek v Laski, 248 Mich 425; 227 NW 817 (1929).
Colonial claims that Ms. Rogers has attempted to split a single cause of action and bring separate suits upon it and that she is barred from doing so by reason of the aforementioned principles of res judicata.
Ms. Rogers replies that her instant truth-in-lending claim is a cause of action separate and distinct from the claim she first litigated, but that even if it is not, she is permitted to split her claim and bring this second suit by reason of the waiver provision of
We conclude that the plaintiff has indeed improperly split a single cause of action and that, in consequence, her instant suit is barred by application of the res judicata rule. We reach that conclusion despite the provisions of
Prior to instituting her original suit, Ms. Rogers had a single cause of action against Colonial for cancellation of the mortgage lien in question. That cause of action arose out of a single transaction or occasion; her scheme to finance repairs to her home.
In her first suit Ms. Rogers alleged no wrongful conduct on Colonial‘s part but merely claimed entitlement to a cancellation of the mortgage held by Colonial which she alleged had been “fraudulently” executed by the then codefendant Tibolla. In response, and by way of affirmative defense, Colonial denied “any knowledge of any wrongful or fraudulent conduct on the part of defendant Tibolla * * *“. In this, the second suit, the plain-
The first suit was brought to a conclusion by a dismissal with prejudice pursuant to an agreement of the parties. A dismissal with prejudice operates as an adjudication on the merits and will bar a subsequent action on the same matter. Waddell v Waddell, 335 Mich 498; 56 NW2d 257 (1953); Edgar v Buck, 65 Mich 356; 32 NW 644 (1887). A judgment dismissing a suit with prejudice, entered pursuant to an agreement of the parties, is given similar effect for purposes of res judicata. See Shank v Castle, supra; Prawdzik v Heidema Bros, Inc, supra; Smoot v Fox, 340 F2d 301 (CA 6, 1964); Anno: Res judicata as affected by fact that former judgment was entered by agreement or consent, 2 ALR2d 512. Consequently, since the judgment entered in the original litigation was a final adjudication on the merits, under traditional res judicata principles the instant action would be barred.
The plaintiff claims, however, that the innovative waiver provision of the second sentence of
“Claims. A complaint shall state as a claim every claim either legal or equitable which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject-matter of the action and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction.
Failure by motion or at the pretrial conference to object to improper joinder of claims or to a failure to join claims required to be joined constitutes a waiver of the required joinder rules and the judgment shall not merge more than the claims actually litigated.” (Emphasis supplied.)
According to plaintiff, Colonial‘s failure “by motion or at the pretrial conference to object * * * to a failure to join [the truth-in-lending claim] * * * constitutes a waiver of the required joinder” and, in effect, permitted her to split her cause of action. We disagree.
Prior to the adoption of
The language of
The drafting Committee Notes to
“The harshness of the present practice as it relates to the enforcement of compulsory joinder provisions (this
is sometimes referred to as the rule against splitting causes of actions) is the fact that it almost always is enforced after the fact, through the doctrine of merger. * * *
“In other words, the scope of the action that will be merged will be determined in the first litigation when it can be corrected rather than in the second litigation when it cannot be corrected.” 1 Honigman and Hawkins, supra, Committee Notes, Rule 203, pp 472-473. (Emphasis added.)
A careful reading of the rule, together with the Committee Notes, indicates an intention by the drafters to preclude in certain cases the merger into a prior judgment of claims not actually litigated in the case although arising out of the same cause of action. It is merger which is precluded by the waiver provision of the rule, not bar.
But the merger doctrine is inapplicable to the case before us. There can be no merger of a subsequent claim into a prior judgment unless the claimant prevailed in the prior case and obtained a judgment into which the cause of action can merge. Merger is the label traditionally assigned to describe the result which obtains when a claimant, usually but not always a plaintiff, splits a cause of action and prevails in the first suit. Bar is the label traditionally assigned to the situation in which a claimant who has split a cause of action and suffered an adverse judgment in the first suit is foreclosed from bringing a subsequent suit upon the same cause of action for the remainder of his claim.
We agree that Ms. Roger‘s truth-in-lending claim did not merge into the judgment entered in the first case, not because of the waiver provisions of
We are convinced that the drafters of
In summary, an unsuccessful party may not bring a series of successive suits raising claims arising out of a single transaction or occurrence by each time alleging some variation in the facts and corresponding legal theory.
While the waiver provisions of
COLEMAN, C.J., and FITZGERALD, J., concurred with RYAN, J.
ORDER DISMISSING APPEAL
October 18, 1979
On order of the Court, a stipulation signed by the attorneys for the parties agreeing to dismissal of this appeal is considered. The stipulation for dismissal is treated as a stipulation to terminate proceedings on the rehearing granted by this Court‘s order of May 7, 1979 (406 Mich 1121) and it is hereby ordered that the order of May 7, 1979 in this cause is vacated and the motion for rehearing is dismissed with prejudice and without costs. To accommodate the desire of the parties that this matter be concluded by this order, it is further ordered that the Clerk shall refrain from issuing the judgment order entered pursuant to this Court‘s opinion of February 8, 1979.
Notes
“.1 Grounds. In a party‘s first responsive pleading, or by motion filed not later than his first responsive pleading, a party may demand that service of process be quashed or that judgment be entered dismissing 1 or more claims asserted against him upon any of the following grounds:
* * *
“(5) the claim is barred because of * * * prior judgment * * *”
Comment d to § 63 of the Restatement is particularly instructive to the case at bar. It provides:
“Where an action is brought for the cancellation of a contract or deed, and the plaintiff in his complaint alleges certain grounds for cancellation, and at the trial he is unable to prove these grounds and a verdict and judgment are given for the defendant, the plaintiff is precluded from maintaining a subsequent action for cancellation of the contract or deed, although in that action he alleges other grounds for cancellation not alleged in the first action although then existing.
“Illustrations:
“6. A brings an action against B for the cancellation of a contract made between A and B, alleging that the contract was procured by the undue influence and fraud of B. After a verdict and judgment for B, A brings a new action for the cancellation of the contract, alleging mental incompetency of A. The prior judgment is a bar to the action.
“7. A brings an action against B for the cancellation of a deed by which A conveyed land to B. In his complaint A alleges that he had never executed or delivered the deed. After a verdict and judgment for B, A brings a new action for the cancellation of the deed, alleging that it was procured by the fraud of B. The prior judgment is a bar to the action.
“8. An action is brought by the United States to have a certain patent of land declared void on the ground that the patentee in violation of a condition in the grant had failed to construct roads. After a verdict and judgment for the defendant, the United States brings a new action to have the patent declared void on the ground that the land was within an Indian reservation. The prior judgment is a bar to the action.
“9. A brings an action against B to cancel a deed, alleging that the conveyance was procured by the fraud of B. After a verdict and judgment for B, A brings an action for cancellation of the deed on the ground that it was invalid for indefiniteness. The prior judgment is a bar to the action.”
Accord, Restatement Judgments, 2d (Tentative Draft No 5, 1978), § 61.1.