December 6, 201
Today, the Indiana Court of Appeals clarified Indiana law governing the doctrine of
res judicata in
Estate of Hilliard v. Jacobs, ___ N.E.2d ___ (Ind. Ct. App. 2011), Cause No. 28A04-1106-CT-284. In so doing, the Court advocated a more liberal application of this doctrine.
less..
In this case, a man filed a lawsuit against a former business partner, which sought to have life insurance policies either terminated or transferred to him. The trial court found for the plaintiff and ordered the former partner to terminate the insurance policies. While that judgment was being appealed, the man died. The Court reversed the trial court's decision.
On remand, the estate tried to amend the complaint to assert other theories of recovery, but the trial court denied that motion. The defendant then successfully moved for summary judgment.
The estate then filed a second lawsuit in another court, attempting to re-litigate the disposition of the life insurance policy and asserting previously-stricken claims based on the same facts and transaction as the first lawsuit. The trial court granted the defendant's motion for summary judgment based on
res judicata and the estate appealed.
On appeal, the estate argued that the trial court erred because her claims were not precluded by the prior litigation. It particularly challenged the third of four factor courts use when applying claim preclusion: whether the matter now in issue was, or could have been, determined in the prior action. In previous decisions, the Court had held that the test generally used for this factor was "whether identical evidence will support the issues involved in both actions." The estate argued that this test should be applied literally. The Court disagreed and applied a practical test instead.
Applying a practical interpretation of the identical evidence test, the claims at issue in the present case could have been adjudicated in the first case. Even though individual pieces of evidence may differ between the two sets of claims, such as evidence of Jacobs' insurable interest in David's life for the first set of claims and the oral agreements between the parties in the second set of claims, the same general evidence would be used to adjudicate all of Hilliard's claims, such as the Cross-Purchase Agreement and the insurance policy itself. ... Choosing to withhold evidence and theories of relief should not be the basis for allowing Hilliard another "bite at the apple."
... Allowing Hilliard's claims to continue would be allowing her the possibility of endless litigation over the life insurance policies – as long as she withheld some piece of evidence or some legal theory, she could attempt to litigate her claims again until she got a ruling in her favor. This would completely eviscerate the doctrine of res judicata.
The Court's rejection of the literal application of the identical evidence test appears to be little more than common sense. Courts will generally not slavishly stick to impractically formulated tests that they themselves invented.
Lesson:
When determining whether the matter now in issue was, or could have been, determined in the prior action and is subject to claim preclusion, a court should look to whether the same general evidence would be introduced in both actions, not whether the evidence would literally be identical.
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