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Res Judicata

September 24, 2020

Res Judicata

Case: Regions Bank v. Nathan I. Prager

Facts: After Plaintiff’s first suit was dismissed for failure to prosecute, Plaintiff filed a Motion to Reconsider. The trial court denied the motion but said the dismissal was neither “with nor without prejudice” and the Plaintiff was “welcome to refile.” Relying on that statement, Plaintiff declined to appeal and filed a second action. Defendant filed a Motion to Dismiss the second suit, arguing it is barred by res judicata. The trial agreed and granted Defendant’s motion.

Appellate Decision: In a 2-1 decision, the intermediate court agreed with the Defendant and upheld the dismissal. The trial court’s statement that Plaintiff could refile was in contravention of Rule 41.02, which dictates the dismissal was “an adjudication upon the merits” unless the order specifies otherwise (which it did not). Thus, res judicata barred re-filing of the same claim between the same parties.

Judge Stafford dissented, writing that the Defendant had not met his burden to show the first suit was adjudicated on the merits: to the extent the initial order of dismissal failed to say the dismissal was “without prejudice,” the order denying the motion to reconsider modified the earlier order by specifying the dismissal “doesn’t bar a rifling of the suit.” Although “the order on the motion to reconsider is not a model of clarity and contains an incorrect statement of law,” Judge Stafford concluded “that the clear intent of the language used in the order is to allow a second suit in this case.”

Review Granted: September 18, 2020.

Prediction: Ben thinks the Supreme Court will agree with the dissent and overturn dismissal of the second suit. There is significant overlap with this case another recently granted review (which coincidentally had the same panel and split in the Court of Appeals): Elvis Presley Enterprises, Inc., et al. v. City of Memphis, et al.