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Schmidt v. Steele


October 21, 2010


On appeal from Superior Court of New Jersey, Law Division, Civil Part, Ocean County, Docket No. L-1981-09.

Per curiam.


Argued September 28, 2010

Before Judges Messano and Waugh.

Plaintiff Carl Schmidt appeals the dismissal with prejudice of his multi-count complaint against defendant Debra Steele. We affirm.

We discern the following facts and procedural history from the record.*fn1 Schmidt and Steele once had a romantic relationship. According to Schmidt, they entered into various financial arrangements during that relationship, including the sharing of household expenses, a loan from Schmidt to Steele, her purchase of a truck owned by Schmidt, and the assignment of a debt owed by third parties to Schmidt. With respect to the latter, Schmidt contends that Steele agreed to take the debt as a tax write-off and pay him any amounts he received from the debtors' bankruptcy estate.

Steele paid Schmidt $4,000 for the loan and $26,000 for the truck. Schmidt sent Steele an email stating that they would "call it even" unless Steele received funds from an insurance claim, which would be paid to Schmidt. The insurance claim was denied.

Steele's income tax return reflects a $15,000 deduction for the bad debt. When Steele received two checks from the debtors' bankruptcy trustee, she returned them, asserting that she was not owed anything by the debtors. The debtors then attempted to have Schmidt listed as the creditor for their $15,000 debt, but that their application was denied by the bankruptcy court.

After their relationship ended, Schmidt filed several actions against Steele seeking to recover money he claimed was still owed to him. The parties have not provided copies of the pleadings in most of those actions. However, it appears that Schmidt filed two actions in the Special Civil Part in Ocean County (DC-1034-06 and DC-6409-06). There was apparently a third complaint in Ocean County (DC-407-06) that also involved the same parties, but it is not clear who filed that action. We understand that these complaints were all dismissed on procedural grounds, at least as between the present parties.

In June 2008, Schmidt filed another action against Steele, this time in the Civil Part in Ocean County (L-719-08). According to Steele, she successfully moved for summary judgment in December 2008. The records of the Appellate Division reflect that Schmidt filed a notice of appeal with respect to that dismissal in February 2009. However, after Schmidt's motion for leave to proceed as an indigent was denied, he made no further filings, and the appeal was dismissed on April 1, 2009 for failure to prosecute.

In May 2009, Schmidt filed the present action in the Civil Part in Ocean County (L-1981-09). Steele filed a motion to dismiss in August 2009. Although originally returnable in late August, the court rescheduled it to September 10, 2009,*fn2 at which time Schmidt failed to appear and the motion was granted. Schmidt filed a motion for reconsideration in October 2009, alleging that his then attorney received no notice of the date for the motion argument.

The motion for reconsideration was heard and denied on December 4, 2009. Judge Rochelle Gizinski gave the following reasons for her decision:

The plaintiff has filed at least four Complaints against the defendant. The most recent was dismissed on September 10, 2009 by [another judge]. The Complaint prior to that had been dismissed by [a different judge] on December 18, 2008.

I have no doubt from reviewing the allegations that the allegation in this Complaint contained in Docket No. 1981-09 are the same claims that were set forth in those two prior Complaints which were previously dismissed and that this Complaint although dressed obviously in legal language since in this attempt the plaintiff availed himself of legal assistance, the general Complaints are the same. They have essentially to do with the $4,000 promissory note, the truck, the $26,000 truck, and the assignment of a $15,000 debt to individuals by the name of the Reichenbachs. Those are essentially the claims that form the basis of this Complaint.

There is another claim which no one really referred to, Counts 2 and 3, that he let the defendant, her two children, and dog move into his home, and that she verbally represented she would pay one-half of the mortgage and utilities. I don't see any evidence of that.

This appeal followed.

In deciding the motion for reconsideration, the judge focused on the merits of Steele's motion to dismiss, rather then delving into the issue of whether Schmidt had notice of the September 10 hearing. Our review of the record convinces us that that the judge correctly concluded that the claims made in the present complaint are barred by the doctrine of res judicata. Consequently, the dismissal was appropriate.

Res judicata, or claim preclusion, "'refers broadly to the common-law doctrine barring relitigation of claims or issues that have already been adjudicated.'" Tarus v. Borough of Pine Hill, 189 N.J. 497, 520 (2007) (quoting Velasquez v. Franz, 123 N.J. 498, 505 (1991)); Orthopaedic Assocs. v. Dep't of Banking and Ins., 405 N.J. Super. 54, 66 (App. Div. 2009). Res judicata bars repetitive litigation when there has been a final judgment by a court of competent jurisdiction and the causes of action, issues, parties, and relief sought are substantially similar. Culver v. Ins. Co. of N. Am., 115 N.J. 451, 460 (1989).

To be successful, the party seeking claim preclusion must demonstrate each of the following requirements:

(1) the judgment in the prior action must be valid, final, and on the merits; (2) the parties in the later action must be identical to or in privity with those in the prior action; and (3) the claim in the later action must grow out of the same transaction or occurrence as the claim in the earlier one. [McNeil v. Legislative Apportionment Comm'n of N.J., 177 N.J. 364, 395 (2003) (quoting Watkins v. Resorts Int'l Hotel & Casino, Inc., 124 N.J. 398, 412 (1991) (citations omitted)), cert. denied, 540 U.S. 1107, 124 S.Ct. 1068, 157 L.Ed. 2d 893 (2004).]

Res judicata, like its close relative collateral estoppel, serves "important policy goals" of "'finality and repose; prevention of needless litigation; avoidance of duplication; reduction of unnecessary burdens of time and expenses; elimination of conflicts, confusion and uncertainty; and basic fairness.'" Hennessey v. Winslow Twp., 183 N.J. 593, 599 (2005) (quoting City of Hackensack v. Winner, 82 N.J. 1, 31-33 (1980)).

Here, although earlier complaints may have been dismissed for procedural reasons, there was a determination on the merits with respect to the complaint filed in June 2008, resulting in summary judgment in Steele's favor. As was his right, Schmidt appealed that decision. However, he failed to perfect his appeal and it was dismissed. The doctrine of res judicata does not permit the filing of essentially the same claim, however differently articulated, following the dismissal of that appeal, nor does it permit the merits of the dismissed appeal to be considered at this time.

Even if the claims were not exactly the same, the entire controversy rule would preclude the filing of additional claims following the adjudication of an earlier action between the same parties. The entire controversy doctrine requires litigants in a civil action to raise all affirmative claims arising from a single controversy that each party might have against another party, including counterclaims and cross-claims. R. 4:30A. It is a preclusionary device, intended to prevent fractionalized litigation by insisting that a party assert all claims arising from a single controversy in a single action. Prevratil v. Mohr, 145 N.J. 180, 190 (1996). See also DiTrolio v. Antiles, 142 N.J. 253, 267 (1995) (citing Cogdell v. Hosp. Ctr., 116 N.J. 7, 15 (1989)).

The doctrine applies to successive suits with interrelated claims. DiTrolio, supra, 142 N.J. at 268. "In determining whether successive claims constitute one controversy for purposes of the doctrine, the central consideration is whether the claims against the different parties arise from related facts or the same transaction or series of transactions." Id. at 267. It is the factual context "giving rise to the controversy itself, rather than a commonality of claims, issues or parties, that triggers the requirement of joinder to create a cohesive and complete litigation." Mystic Isle Dev. Corp. v. Perskie & Nehmad, 142 N.J. 310, 323 (1995); see also DiTrolio, supra, 142 N.J. at 267-68 ("It is the core set of facts that provides the link between distinct claims against the same or different parties and triggers the requirement that they be determined in one proceeding."). Here, the various claims all arose out of Schmidt's financial relationships with Steele during the period they were romantically involved.


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