Moreover, at oral argument, counsel for both parties confirmed that they could find no New Jersey case in which a prior "John Doe" action had been held to bar a subsequent action based upon the entire controversy doctrine. Tr. of Oral Argument at 8, 27. The fact that there can be no "finality" to a judgment against a "John Doe" defendant suggests that the entire controversy doctrine was not intended to apply to these facts and circumstances.
"Like other legal doctrines . . . the entire-controversy doctrine has its limits." Mortgagelinq, 142 N.J. at 350 (Pollock, J., dissenting). In the present case, Honda's motion explores the outer perimeters of the doctrine. Because the precise issue raised by Honda's motion is one of first impression in New Jersey, this Court must consider the peculiar facts of this case in light of the stated objectives of the entire controversy doctrine as articulated by the New Jersey Supreme Court, bearing in mind the legal principles to be applied by a district court sitting in diversity, when faced with a novel issue of state law.
1. Comprehensive and Conclusive Determination of a Legal Controversy
The application of the entire controversy doctrine to the facts of this case would not promote "the comprehensive and conclusive determination of a legal controversy." Mystic Isle, 142 N.J. at 322. Beyond the obvious conclusion that application of the doctrine in this case might very well bar forever a determination of the legal controversy between Hulmes and Honda,
the first objective of the doctrine is meant to prevent plaintiffs, who are, or should be, aware of a cause of action, from "deliberately with [holding] their claims in the first action" and thereby fragmenting the litigation. Mortgagelinq, 142 N.J. at 341.
At oral argument, counsel for Honda suggested that the failure to name Honda in the first "John Doe" action might well be a part of a tactical litigation "strategy." Tr. of Oral Argument at 31. This court categorically rejects such a suggestion. It is not only unsupported by the record, it is fanciful. Whether this Court may impute to the Tomar Firm the knowledge of plaintiff's personal counsel, Coben, who apparently had hired an expert to investigate a products liability claim against Honda prior to December, 1992, both Kaplan and Brekus testify that they had no personal knowledge that such a products liability claim was viable. Kaplan Certif. P 4; Brekus Certif. P 4. Furthermore, it is difficult to imagine what counsel would have hoped to achieve by such a seemingly suicidal tactical litigation "strategy."
The entire controversy doctrine seeks to ensure that a party does not unfairly withhold some of his or her claims, so as to "'render the pending litigation merely one inning of the whole ball game.'" Kozyra v. Allen, 973 F.2d 1110, 1112 (3d Cir. 1992) (quoting William Blanchard Co. v. Beach Concrete Co., 150 N.J. Super 277, 294, 375 A.2d 675 (App. Div. 1977)). To apply the doctrine to the facts of this case would end the game before the first pitch is thrown.
2. Achieving Party Fairness
In applying the entire controversy doctrine to any set of facts, it must be borne in mind that "the Rules of Practice are not an end unto themselves, but a means of serving the ends of justice." Viviano v. CBS, Inc., 101 N.J. 538, 550-51, 503 A.2d 296 (1986). Even though the entire controversy doctrine is widely recognized as the strictest rule of compulsory joinder in the nation, the Appellate Division of the New Jersey Superior Court would "not suggest the doctrine requires application regardless of the equity of an individual situation." Burrell v. Quaranta, 259 N.J. Super. 243, 612 A.2d 379 (App. Div. 1992).
"The 'polestar of application of the rule is judicial 'fairness'" DiTrolio, 142 N.J. at 272 (quoting Reno Auto Sales, Inc. v. Prospect Park Sav. and Loan Ass'n, 243 N.J. Super. 624, 630, 581 A.2d 109 (App. Div. 1990)). The doctrine particularly focuses on fairness to "those sued in the second suit who were prevented from participating in the first." Id. at 272-73. Honda was only "prevented" from participating in the first suit by virtue of the fact that the suit was brought as a "John Doe" action. There is no unfairness in being "prevented" from participating as a defendant in a suit in which no defendant has participated.
Honda repeatedly points to the fact that Hulmes' first "John Doe" action in the Law Division (Docket No. L-2893-92) was dismissed "with prejudice." Honda's Brief at 6-7. Counsel for Hulmes argues that the dismissal "with prejudice" was a mere oversight, there being no reason why Hulmes would have sought dismissal "with prejudice." Kaplan Certif. P 8; Brekus Certif. PP 7-8. Honda cites Velasquez v. Franz, 123 N.J. 498, 507, 589 A.2d 143 (1991), for the proposition that dismissal "with prejudice" operates as an adjudication on the merits for purposes of claim preclusion.
Id. (quoting Gambocz v. Yelencsics, 468 F.2d 837, 840 (3d Cir. 1972) (Aldisert, J.) holding that a "dismissal with prejudice constitutes an adjudication on the merits as fully and completely as if the order had been entered after trial." (in turn citing Lawlor v. National Screen Serv. Corp., 349 U.S. 322, 327, 99 L. Ed. 1122, 75 S. Ct. 865 (1955))). See Honda's Brief at 6 n.3. However, Honda was not a party to the first action, and it is nowhere asserted, nor could it be, that Honda was in privity with the driver of the other ATV involved in the accident. Therefore, claim preclusion does not bar the present action against Honda.
Nevertheless, Honda argues that the legal principles that define a valid, final judgment on the merits for purposes of claim preclusion are identical to those that define the contours of a "prior litigation" for purposes of applying the entire controversy doctrine. Honda's Brief at 6-7. Defendant cites no law to support this proposition, and this Court is unwilling to predict that the New Jersey Supreme Court would apply its entire controversy doctrine to bar subsequent litigation whenever a prior suit has been terminated by a dismissal "with prejudice."
One New Jersey appellate court has recognized that: "If res judicata and collateral estoppel principles, which are predicated upon actual issue litigation, are inapplicable in [certain] circumstances, then, a fortiori, the entire controversy doctrine, predicated on litigation which could have, but did not take place, is inapplicable," Cafferata v. Peyser, 251 N.J. Super. 256, 262, 597 A.2d 1101 (App. Div. 1991) (emphasis added). This statement is noteworthy, because it suggests that a higher standard must be met to apply the entire controversy doctrine than the standard applicable to claim preclusion. In other words, just because a dismissal with prejudice may act as a bar to relitigation when both parties were engaged in an earlier action, it does not follow that a dismissal with prejudice should automatically bar a second action when one party, the defendant, was not before the first tribunal. "Fairness to the plaintiff must also be considered." DiTrolio, 142 N.J. at 273.
Furthermore, as Honda itself points out, a dismissal "without prejudice" can, under certain circumstances, trigger the application of the entire controversy doctrine to bar a second suit. See DiTrolio, 142 N.J. 253, 662 A.2d 494; Mystic Isle, 142 N.J. 310, 662 A.2d 523; Honda's Reply Brief at 17. Therefore, the characterization of the dismissal as "with prejudice," or "without prejudice," is clearly not dispositive of whether a second suit is barred by the entire controversy doctrine. As Justice Cardozo once observed in another context, the application of a rule should not be subject to the "tyranny of labels." Snyder v. Massachusetts, 291 U.S. 97, 114, 78 L. Ed. 674, 54 S. Ct. 330 (1934). Justice Cardozo might well have been speaking about the entire controversy doctrine when he explained that "a court frames a rule which is general in form, though it has been wrought under the pressure of particular situations. . . . [And soon] another situation is placed under the rule because it is fitted to the words, though related faintly, if at all, to the reasons that brought the rule into existence." Id.
3. Judicial Economy
Defendants have pointed to no case, and this Court has found none, in which the entire controversy doctrine was applied to bar a second suit when the plaintiff in the first suit, a "John Doe" action, had neither served the complaint, conducted discovery, or attempted to amend the complaint to name an actual party, and the suit, moreover, had enjoyed a life span of less than one week.
In Circle Chevrolet and Mystic Isle the concerns raised were whether the plaintiff had enough time to become aware of his professional malpractice cause of action before the first suit terminated. In Circle Chevrolet, the New Jersey Supreme Court concluded that the plaintiff was aware of his cause of action for legal malpractice for over a year before and during the pendency of the prior action. Circle Chevrolet, 142 N.J. at 301-02. The prior litigation continued for over two years. Id. at 286-88. In Mystic Isle, the court stated that, not only was the plaintiff aware of his cause of action for professional malpractice during the pendency of the prior action, but that it "purposely ignored its obligation to assert its claim" in the earlier litigation. 142 N.J. at 332. The prior litigation continued for over three years. Id. at 318-20.
In DiTrolio, the New Jersey Supreme Court clearly stated that the weight of the [judicial] economy factor lessens when a case is dismissed soon after the complaint is filed," but stressed that DiTrolio's prior lawsuit involved "one year of vigorous pre-trial litigation, including fairly extensive discovery." DiTrolio, 142 N.J. at 278. In the present case, the judicial economy factor "lessens" almost to the vanishing point, because the suit was dismissed only one week after it was filed, and no discovery was ever conducted.
Similarly, in Mortgagelinq, there was protracted litigation in the federal forum, and the New Jersey Supreme Court characterized plaintiffs' decision not to join the potential New Jersey defendants as a deliberate tactical decision "to fragment [the] litigation." Mortgagelinq, 142 N.J. at 338. Many cases support the conclusion that the entire controversy doctrine will bar a second suit when the prior suit has reached the merits of some, but less than all, of the plaintiff's claims, or when the prior suit has been prosecuted against some, but less than all, of the possible defendants. See, e.g., Circle Chevrolet, 142 N.J. 280, 662 A.2d 509, DiTrolio, 142 N.J. 253, 662 A.2d 494. Honda's argument that the entire controversy doctrine is intended to bar a second suit where the first suit does not reach the merits of any of plaintiff's claims against any possible defendant finds no support in the rationale which gave birth to the concept of mandatory joinder.
While the contours of the entire controversy doctrine are admittedly difficult to discern, I cannot conclude that the New Jersey Supreme Court would apply the doctrine to the facts of this case. To do so would not promote any of the doctrine's three objectives articulated by the New Jersey Supreme Court in Mystic Isle, 142 N.J. at 322, and would transform what began as a relatively simple rule of mandatory joinder into an instrument of injustice and confusion.
Accordingly, this Court concludes that the result which Honda urges would dislodge the entire controversy doctrine from its jurisprudential foundations and turn it into a trap for the wary and the unwary alike. Cf. Cafferata, 251 N.J. Super. at 263. For the reasons set forth above, Honda's motion for summary judgment, based upon New Jersey's entire controversy doctrine, will be denied. The court will enter an appropriate order.
STEPHEN M. ORLOFSKY
United States District Judge
Dated: May 10, 1996
This matter having come before the Court on May 3, 1996, on the motion of defendants, Honda Motor Company, Ltd., Honda Research and Development Group, Ltd., Honda R & D North America, Inc., and American Honda Motor Company, Inc., for summary judgment, based upon New Jersey's entire controversy doctrine, Lewis M. Levin, Esq. and Joseph Viola, Esq., of Lewis M. Levin & Associates, appearing on behalf of the plaintiff, Robert T. Hulmes, and Robert St.L. Goggin, Esq. and Brian C. Dareff, Esq., of Marshall, Dennehy, Warner, Coleman & Goggin, appearing on behalf of defendants; and,
The Court having considered the oral argument of counsel, as well as the briefs, depositions, certifications and affidavits on file, for the reasons set forth in this Court's OPINION, filed concurrently with this ORDER,
It is on this 10th day of May, 1996, ORDERED that defendants' motion for summary judgment based upon New Jersey's entire controversy doctrine is DENIED.
STEPHEN M. ORLOFSKY
United States District Judge