Opinion
Civil Action No. 03-0455A.
January 26, 2004
MEMORANDUM AND ORDER ON DEFENDANT OTTENS' MOTION FOR SUMMARY JUDGMENT
INTRODUCTION
In January 2002 the plaintiff filed a complaint against Defendant Woodbridge Corporation in the Worcester District Court. In November 2002 Buduo sought to amend its complaint to add Alan Ottens individually. The district court denied the plaintiff's motion to amend their complaint. Plaintiff subsequently filed this suit in Superior Court on March 5, 2003. Buduo was granted summary judgment as to liability on the claims against Woodbridge in the district court case in September 2004. The defendant Alan Ottens now brings this motion for summary judgment on the basis of claim preclusion. For the reasons discussed below, the defendant's motion for summary judgment is ALLOWED.
FACTUAL BACKGROUND
On January 14, 2002, plaintiff Buduo Contractors Corporation ("Buduo") sued defendant Woodbridge Group ("Woodbridge") in Worcester District Court. See Statement of Material Undisputed Facts pp. 2. The above suit arose out of an August 2001 contract between Buduo and Woodbridge for Woodbridge to perform contruction services and supply construction materials to a job site, for which Buduo would pay. See id. exhibit 2. Buduo's complaint alleged four counts including claims of conversion, fraud, deceit and violations of Massachusetts General Laws chapter 93A, unfair and deceptive trade practices. See id. exhibit 1.
Buduo asserts that Defendants, Paul Ventura, Alan Ottens and Arthur Urgent do business under the entity name Woodbridge group. See Statement of Undisputed Material Facts, exhibit 1.
On November 4, 2002, Buduo filed a motion to amend their complaint to add Alan Ottens individually. See id. at 2. The Worcester District Court denied Buduo's motion in form and substance. See id.; see id., exhibit 4. Subsequently, on March 5, 2003, Buduo filed a complaint in Superior Court against Woodbridge and Allan Ottens ("Ottens"), Paul Alan, and Arthur Urgent as individuals. See id. at 2. On September 3, 2004, in the Worcester District Court action, Buduo was granted summary judgment as to liability on the claims against Woodbridge. See id.
DISCUSSION
Summary judgment is granted where there are no issues of material fact and when the moving party is entitled to judgment as a matter of law. Mass. R. Civ. P. 56(c); Cassesso v. Commissioner of Correction, 390 Mass. 419, 422 (1983); Community National Bank v. Dawes, 369 Mass. 550, 553 (1976). The moving party bears the burden of demonstrating affirmatively the absence of a triable issue, and that the moving party is entitled to a judgment as a matter of law. Pederson v. Time, Inc., 404 Mass. 14, 16-17 (1989). A party moving for summary judgment, not bearing the burden of proof at trial, may demonstrate the absence of a triable issue by showing that the nonmoving party has no reasonable expectation of proving an essential element of its case at trial. Flesner v. Technical Communications Corp., 410 Mass. 805, 809 (1991); Kourouvacilis v. General Motors Corp., 410 Mass. 706, 716 (1991). A moving party can meet its burden by showing the non-moving party lacks evidence to support the non-moving party's case. See Kourouvacilis, 410 Mass. at 711. Once the moving party meets that burden, the non-moving party must show by admissible evidence that there does exist a dispute as to material facts. Id. (citing Godbout v. Cousens, 396 Mass. 254, 261 (1985)). A non-moving party plaintiff must set forth specific facts showing the existence of an issue for trial. Id. (citing Mass. R. Civ. P. 56(e)); Wheatley v. American Telephone Telegraph Co., 418 Mass. 394, 397 (1994).
"Res judicata" is the term used for legal doctrines by which one judgment has a binding effect on another judgment. See Bagley v. Moxley, 407 Mass. 633, 636 (1990). Res judicata includes both claim and issue preclusion. Id. Claim preclusion precludes a party from bringing a claim based upon the same claim that was subject to an earlier action between the same parties or their privies. Id. Issue preclusion is a doctrine precluding relitigation of an issue determined in an earlier action, when that same issue arises in later litigation based upon a different claim between the same parties or their privies. Id. at 637.
"The doctrine of claim preclusion makes a valid, final judgment conclusive on the parties and their privies . . ." TLT Construction Corp., 48 Mass. App. Ct. 1, 4 (1999). The three required elements for the application of claim preclusion are as follows; (1) identity or privity of the parties to the present and prior actions; (2) identity of the cause of action; and (3) prior final judgments on the merits. Id. Issue preclusion also requires proof of the three following elements; (1) a final judgment on the merits in the earlier adjudication; (2) the party or their privity against whom estoppel is asserted; (3) the issue in the prior adjudication is identical to the issue in the current adjudication. Id. at 5. A "final judgment" need not be a final judgment in the "traditional sense". See Tausevich v. Board of Appeals of Stoughton, 402 Mass. 146, 148-49 (1988). The adjudication has preclusive effect if the proceeding had the "elements of adjudicatory procedure", such as argument and the parties' opportunity to be heard. See TLT Construction, 48 Mass. App. at 9 (maintaining arbitration award as final judgment).
For issue preclusion, the issue in the prior litigation must have been essential to the judgment. Id. at 5.
The Tausevich case dealt with an issue preclusion claim.
The defendant Ottens maintains that the denial of Buduo's motion to amend in the Worcester District Court served as a final judgment, thereby barring plaintiff's claims against Ottens in the present suit under the doctrine of claim preclusion. Buduo and Ottens do not dispute that Ottens and Woodbridge were "in privity." See Defendant's Brief in Support of Motion for Summary Judgment, pp. 4 (noting Ottens was an employee of Woodbridge); see also Plaintiff's Opposition to Defendant's Motion for Summary Judgment, pp. 6 (acknowleging Ottens in privity with Woodbridge). Identity of the cause of action also exists. "A claim is the same for [claim preclusion] purposes if it is derived from the same transaction or series of connected transactions." TLT Construction Corp., 48 Mass. App. Ct. at 8. Ottens argues that the complaints in this case are virtually the same as those that Buduo attempted to include in their amended complaint in the Worcester District Court. See Defendant's Statement of Similarities (comparing amended complaint to Superior Court complaint). The complaints that Buduo sought to add to its complaint in the Worcester District Court are in fact the same complaints that plaintiff asserts in counts III and IV of the complaint submitted in the Superior Court action. The language is virtually identical. See Plaintiff's Verified Complaint (Superior Court); see also Plaintiff's Motion to Amend Complaint (District Court). All claims arise from Buduo's original transactions with Woodbridge.
Ottens says that Counts II-IV in the plaintiff's complaint in this action are the same claim filed in the action in the Worcester District Court. See Defendant's Brief in Support of Motion for Summary Judgement, pp. 1. Ottens says that Count V of the plaintiff's complaint is a premature reach and apply request since Plaintiff does not have an underlying judgment against Ottens. See id.
For claim preclusion to bar the plaintiff's claims in this Court, the Worcester District Court's denial of the plaintiff's motion to amend in the district court case must serve as a "final judgment". A denied motion to amend has no bearing in and of itself on whether the plaintiff can bring the denied claim in a separate law suit. See Integrated Technologies Limited v. Biochem Immunosystems, Inc., 2 F. Supp. 2d 97, 103 (D. Mass. 1998). A denied motion to amend, however, may trigger claim preclusion if the denial of the motion to amend is based on, and constitutes an adjudication on the merits of the proposed new claim. See id. In cases where a denial of a motion to amend does constitute an adjudication on the merits, the plaintiff is permitted to appeal the denial, but not permitted to assert the claim in a second lawsuit. Id.
Ottens relies on the Jarosz case to suggest that the motion to amend is not a final judgment because in that case a denied motion to disqualify did not trigger issue preclusion. See Jarosz v. Palmer, No. 98-P-1062 (Mass.Super.Ct. Middlesex 2000) (Borenstein, J.). Jarosz is distinguishable from this case. The denial of the motion to disqualify in that case was an interlocutory order, not appealable until after the final decision in the case. See id. (A procedure for authorizing an interlocutory appeal existed, but was a procedure extremely unlikely to succeed on a motion).
If the denial of the motion to amend was based on the merits of the proposed new claim, the fact that the first lawsuit is still pending when the plaintiff files the new lawsuit is on no bearing on whether claim preclusions does or does not apply. Id. at 104. Since the denial of the motion to amend was "on the merits" it constitutes a "final judgment" and the doctrine of claim preclusion does apply. Id.
While not necessarily true of all motions to amend, this Court adopts the Federal District Court's opinion, finding that in this particular case, the denial of the motion to amend fits the specific factual pattern invoking the doctrine of claim preclusion. The Worcester District Court's denial of the motion to amend serves as a final judgment in this case. The Worcester District Court denied Buduo's motion to amend in both substance and form. See Worcester District Court Notice, Plaintiff's Motion to Amend Complaint (Nov. 15, 2002). Furthermore, Buduo did not appeal the Worcester District Court's decision to deny their motion to amend the complaint. See Civil Docket No. 200262CV000089.
The claims of 93A violations were denied as to substance and form. Id. Violations with respect to personal liability were denied with respect to the form of the complaint. Id. Otten's argues, however, that if a motion is not denied on the merits, then the "ordinary principles of claim preclusion apply". See Defendant Alan Ottens' Reply Memorandum, pp. 3; see also Integrated Technologies Limited, 2 F.Supp. 2d at 103. Accordingly, if the claim is transactionally related to the one subject to the pending lawsuit and existed when the lawsuit was filed, then the defendant had an obligated to bring that claim in the earlier suit, or bring a motion to amend earlier in that earlier suit. See id.; see Integrated Technologies Limited, 2 F.Supp. 2d at 102-03.
ORDER
For the reasons discussed above, it is hereby ORDERED that defendant Ottens' motion for summary judgment is ALLOWED.