on the merits of a cause of action, the parties are thereafter bound 'not only as to every matter which was offered and received to sustain or defeat the claim or demand, but as to any other admissible matter which might have been offered for that purpose.' The judgment puts an end to the cause of action, which cannot again be brought into litigation between the parties upon any ground whatever, absent fraud or some other factor invalidating the judgment.
Ananconda-Ericsson Inc. v. Hessen (In re Teltronics Services, Inc.) 762 F.2d 185, 190 (2d Cir. 1985), quoting, Commissioner v. Sunnen, 333 U.S. 591, 597, 92 L. Ed. 898, 68 S. Ct. 715 (1948) (citations omitted). Thus, it does not appear that the sequence of court filings controls the application of res judicata. Rather, where parallel actions are commenced, res judicata will attach to the action in which a judgment is first entered.
In this Circuit, "a stipulation dismissing an action with prejudice can have the preclusive effect of res judicata." Samuels v. Northern Telecom, Inc., 942 F.2d 834, 836 (2d Cir. 1991). A dismissal with prejudice serves as an adjudication on the merits and bars subsequent suits by the plaintiff on the same causes of action. Nemaizer v. Baker, 793 F.2d 58, 60 (2d Cir. 1986); Cahill v. Arthur Andersen & Co., 659 F. Supp. at 1120. Not only is the plaintiff barred as to matters actually litigated in the prior action but as to all relevant issues which could have been, but were not, raised in the earlier action. Samuels v. Northern Telecom, Inc., 942 F.2d at 836; Nemaizer v. Baker, 793 F.2d at 61.
In Samuels, the plaintiff, a black man, had been fired less then one month after giving deposition testimony damaging to his employer in a civil rights suit. Plaintiff filed an action for employment discrimination in federal court under 42 U.S.C. § 1981 and 42 U.S.C. § 2000e-3 ("Title VII"). While that case was pending, the Supreme Court handed down its decision in Patterson v. McLean Credit Union, 491 U.S. 164, 105 L. Ed. 2d 132, 109 S. Ct. 2363 (1989), which implied that § 1981 did not cover employment discrimination. Samuels v. Northern Telecom, Inc., 942 F.2d at 835. Based on this decision, Samuels agreed to dismiss his action with prejudice. Later, after obtaining a right to sue letter from the EEOC, Samuels filed a second action alleging violations of Title VII. Id. at 836.
The Second Circuit affirmed the district court's dismissal of the action under the doctrine of res judicata, writing:
Res judicata may not be avoided on the basis of overbroad pleading appearing in the initial complaint or an attorney's ill-considered decision to enter into an all-encompassing stipulation of withdrawal with prejudice.
* * * *
Faced with these disturbing allegations, it would have been preferable if plaintiff could have his day in court. Unfortunately, however, that possibility is foreclosed by the circumstances presented herein, even if they were only inadvertent.
942 F.2d at 837
Considering the facts here in the light most favorable to the non-moving party, it is assumed that Official abandoned its state court action only because the Second Circuit had reinstated its federal action. See Fredericks Affirmation PP 10, 11. However, neither mistake nor unintentional error can form the basis for an exception to the general rule, in this Circuit, that a stipulation of dismissal with prejudice will bar re-litigation of those dismissed claims under the doctrine of res judicata. See Samuels, 942 F.2d at 837. Thus, the claims dismissed in the Official Action are barred.
The doctrine of res judicata bars causes of action specifically pleaded in the earlier-resolved action as well as claims that could have been pleaded in that action. See Samuels v. Northern Telecom, Inc., 942 F.2d at 836. Here, Official alleged RICO claims in its first federal complaint but not in the Official Action. Thus, at the time the Official Action was commenced in state court, Official had sufficient knowledge to plead RICO if it so chose. Since state and federal courts have concurrent jurisdiction over RICO claims, Tafflin v. Levitt, 493 U.S. 455, 110 S. Ct. 792, 107 L. Ed. 2d 887 (1990); accord, Simpson Elec. Corp. v. Leucadia, Inc., 72 N.Y.2d 450, 534 N.Y.S.2d 152, 530 N.E.2d 860 (N.Y. 1988), Official's RICO claim could have been plead in the Official Action and, therefore, is now also barred.
The doctrine of res judicata also bars litigation of the same causes of action against defendants who were known to plaintiff at the time the first action was filed but were not named where the newly-added defendants have a sufficiently close relationship to the original defendant. See Ruskay v. Jensen, 342 F. Supp. 264 (S.D.N.Y. 1972), aff'd sub nom. Ruskay v. Waddell, 552 F.2d 392 (2d Cir.), cert. denied, 434 U.S. 911, 98 S. Ct. 312, 54 L. Ed. 2d 197 (1977); Cahill v. Arthur Andersen & Co., 659 F. Supp. 1115, 1122-23; Morgan Consultants v. American Telephone and Telegraph Co., 546 F. Supp. 844 (S.D.N.Y. 1982). Where the "new" defendants are sufficiently related to one or more of the defendants in the previous action which arises from the same transaction all defendants may invoke res judicata. Morgan Consultants v. AT&T, 546 F. Supp. 844, 847, n.5 (S.D.N.Y. 1982).
At the time of the filing of the Official Action, the identity of the individual defendants, Friedman and Holpp, was known to plaintiff; in fact, the original complaint in federal court named these individual as defendants. The individuals were then and are now alleged to be principal officers of Kable who committed wrongful acts in their capacity as officials of Kable. As officers of Kable, the individual officers are sufficiently related to defendant Kable, such that they are not "independent." Additionally, the federal action and the Official Action arise from the same set of operative facts. Accordingly, the doctrine of res judicata also serves to bar the prosecution of this action against defendants Friedman and Holpp.
For the above reasons, defendant's motion for summary judgment is granted, and the plaintiff's complaint is dismissed with prejudice.
Dated: New York, N.Y.
January 14, 1993
Loretta A. Preska, U.S.D.J.
UNITED STATES v. PAULINO
Function of the Court
Function of Jurors
Jury's Recollection Governs
Note-Taking by Jurors
Duty to Base Verdict on Evidence
Motions, Objections & Questions by the Court
Government as a Party
Indictment is not Evidence
Burden of Proof
Presumption of Innocence
Guilt is Personal
Only the Defendant is on Trial
Direct and Circumstantial Evidence
Circumstantial Evidence of Knowledge, Willfulness, and Intent
[Requirement of Particular Investigative Techniques]