In th e S u p re m e Co u rt o f Ge o rg ia

De c id e d : Ma

y 1 1, 2 01 5

S 1 4G1 2 2 3 . BOS TICK v . CMM P ROP ERTIES , INC. e t a l.

HINES , P re sid in g Ju stic e

.

Th is C o u rt g ra n te d c e rtio ra ri t o th e Co u rt o f Ap p e a ls in Bo stic k v

. CMM

Pro pe rtie s, 3 2 7 G a

. Ap p

. 1 3 7 (7 5 5 S E2 d 89 5) (2 0 14 ), to c o n sid e r wh e th e r th e

Co u r t o f A p p e a l s e rre d wh e n it fo u n d a n id e ntity o f p a rtie s (o r th e ir p riv ie s)

su ffic ie n t to p e rm it th e a

p p lic a tio n o f re s ju d ic a ta

. Se e OCGA § 9 -1 2 -4 0

. 1 F o r

th e re a so n s wh ic h fo llo w, we fin d th a t th e C o urt o f Ap p e a ls e rre d in th is re g ard
,

a n d c o n se q u e ntly , we re ve rse a n d re m a n d

.

Th e fa c ts a s fo un d b y th e C o u rt of Ap p e a ls a re th e fo llo win g

. In Ja n u a ry

1 9 9 2, D iv e rsifie d Ca

p ita l Ma n a g e m e n t, I n c

. (“ Div e rsifie d ” ) le a se d pre m ise s

d e sig n a te d a s a g ro c e ry sto re to Ja m e s B o s tic k (“ Bo stic k ” ). In Au g u st 1 9 9 2
,

1 OCGA § 9-12-40 provides:

A judg ment of a court o f competent jurisdiction shall be conclusive b etween the same parties and their privies as to all matters put in issue or which under the rules of law mig ht have been put in issue in the cause wherein the judg ment w as rendered until the judg ment is reversed or set aside.Div e rsifie d a ssig n e d its ri g h ts a s le sso r to In g ra m Tim b e r En te rp rise s, L.P

. (“ In g ra m ” ). In Oc to b e r 2 0 0 0
, Bo stic k , with th e a pp ro v a l o f In g ra m , su b le a se d

th e p ro p e rty to CMM P ro p e rtie s, In c

. (“ CMM” ). Th e su b le a se wa s su b je c t to a ll

th e te rm s o f th e o rig in a l le a se , re fe rre d to b y th e p artie s a s th e “ m a ste r le a se .”

In Ju n e 2 0 0 5
, In gra m file d su it in su p e rio r c o u rt a g a in st CMM a nd th re e

in d iv id u a l g u a ra nto rs o f th e su b le a se (c o lle c tiv e ly “ th e CMM p a rtie s” ), b u t n o t

a g a in st B o stic k

. In g ra m c la im e d d e fa u lt u n d e r th e te rm s o f th e m a ste r le a se a n d

su b le a se , a n d so u g h t liq u id a te d d a m a g e s un de r p a ra g ra p h 22 o f th e m a ste r le a se

.

Th e tria l c o u rt g ra n te d su m m a ry ju d g m e n t to th e CMM p a rtie s, fin d in g th a t th e

p u rp o rte d liq u id a te d d a m a g e s so u g h t u n d e r p a ra g ra p h 2 2 c o nstitu te d a v o id a n d

u n e n fo rc e a

b le p e n a lty . In g ra m

n e v e r a p pe a le d th a t fin a l ju d g m e n t.

In Ja n u a ry 2 0 1 0
, In gra m f i l e d a c o m

p la in t fo r re n t a n d b re a c h o f c o n tra c t

a g a in st Bo sti ck
, se e k in g th e sa m e liq u id a te d d a m a g e s so u g h t in th e first su it.

Th e n in N o v e m

b e r 2 0 1 0
, Bo stic k file d a th ird -p arty c o m p la in t a g a in st th e CMM

p a rtie s, c la im in g th a t if h e wa s liab le t o I n g r a m , th e n th e CMM p a rtie s we re

liab le to h im

. 2 Th e CMM p a rtie s m o v e d fo r su m m a ry ju dg m e nt, a sse rtin g , in te r

2 I n December 2012, I ng ram filed an amendment to its complaint for rent and breach of contract, invoking , inter alia, other remedy provisions of parag raph 22 of the master lease.

2a lia
, re s ju d ic a ta ba se d on th e ju d g m e n t in th e first la w su it. Be fo re th e tria l c o urt

ru le d o n th e su m m a

ry ju dg m e n t m o tio n , In g ra m a n d B o stic k e n te re d in to a

c o n se n t ju d g m e n t, wh ic h pro v id e d th a t In g ra m wa s e n title d to ju dg m e n t in

e x ce s s o f $ 1 m illio n , b u t th a t In g ra m wo uld n o t a tte m p t to c o lle c t s u c h

ju d g m e n t. In ste a d
, th e c on se nt ju d g m e n t wo uld b e s atisfie d b y Bo stic k p u rsu in g

th e c a se a g a in st th e CMM p a rtie s. Th e y a gre e d th a t In g ra m wo uld g e t two -th ird s

a n d Bo stic k

o n e -th ird o f a n y a m o un t c o lle c te d fro m th e CMM p a rtie s.

S u b se q u e n tly
, th e tria l c o u rt g ra n te d th e CMM pa rtie s’ m o tio n fo r su m m a ry
ju d g m e n t, fin d in g th a t re s ju d ic a ta p re c lu d e d th e su it; th a t th e re m e d y p ro v isio n s

o f th e m a ste r le a se we re v o id a n d u n e nf o r c e a b l e p e n a ltie s; a n d th a t u n d e r th e

te rm s o f th e c o n se n t ju d gm e n t b e twe e n I n g ra m a n d Bo stic k th e re wa s n o re a l

th re a t o f liability fo r B o stic k
, a n d th u s, no se c o n d a ry lia b ility to b e re c o v e re d b y

th e th ird -p a rty a c tio n

.

Bo stic k a p p e a le d to th e Co u rt o f Ap p e a ls, a rg u in g , in te r a lia
, th a t h e wa s

n o t a p a rty to th e first la wsu it, th e re fo re , it c o u ld n o t pre c lu de h im in th e se c o n d

o n e

. Th e C o u rt o f A p p e a ls a ffirm e d , an d a s to th e issu e o f re s ju d ic a ta , fo u n d

th a t Bo stic k a nd th e CMM p a rtie s we re p riv ie s, a n d th e re fo re , th a t Bo stic k wa s

3b o u nd b y th e ju d g m e n t in th e first la wsu it. 3

Th is a n a ly sis b y th e Co u rt o f A p p e a ls a n d its c o n se q u e n t c o n c lu sio n a re

fa ta lly fla we d b e c a

u se th e y a re p re m ise d on a b a sic m isc on c e p tio n o f th e

d o c trin e o f re s ju d ic a ta

. As n o te d
, th e d o c trin e p ro v id e s th a t th e ju d g m e n t o f

a c o urt c o m

p e te nt to re n d e r it i s c o n c lu siv e a s to th e sa m e p a rtie s a n d th e ir

p riv ie s an d in re g a rd to a ll m a tte rs a c tu a lly p u t in issu e o r w h i c h m ig h t h a v e

b e e n la wfu lly pu t in issu e in th e a c tio n in wh i c h th e ju d g m e n t wa s re n d e re d

.

OCGA § 9

– 1 2

– 4 0. Th e p u rp o se o f re s ju d ic a ta is to “[p re v e n t] th e re -litig a tio n

o f a l l c la im s wh ic h h a v e a lre a d y be e n a d ju d ic a te d
, or wh ic h c o u ld h a v e b e e n

a d ju dic a te d
, b e twe e n id e ntic a l p a rtie s o r th e ir priv ie s in id e n tic a l c a u se s o f

a c tio n .” Bo d

y o f Ch ris t O v er c o m i n g Ch u rc h o f Go d v

. B rin so n , 2 8 7 Ga

. 4 8 5
,

4 8 6 (6 9 6 S E2 d 6 6 7 ) (2 0 1 0 ), q u o tin g Ka ra n v

. Au to

– Own e rs In s ., 2 8 0 Ga

. 5 4 5
,

5 4 6 (6 2 9 S E2 d 2 6 0 ) ( 2 0 0 6 ). As OCGA § 9-1 2 -4 0 re fle c ts, th e re are th re e

re q u ire m e n ts w h ic h m

u st b e sa tisfie d in o rd e r fo r re s ju d ic a ta to a p p ly : t h e r e

m u st be id e n tity of th e c a

u se o f a c tio n , id e n tity of th e pa rtie s o r th e ir p riv ie s, a n d

p re v io u s a d

ju d ic a tio n o n th e m e r i t s b y a c o u rt of c o m p e te n t ju risd ic tio n

.

3 I n Division 1 o f its o pinion, the Court of Appeals ruled in favor of B o stick on an issue of
venue, b ut such ruling i s n o t a p a rt of this g ranted certiorari. I n D ivision 3, the Court of Appeals determined that it need n ot addre s s t h e r emaining claims o f e rror g iven its holding in Division 2 based upon res judicata.

4Ch u rc h o

f Go d v

. Brin so n , su p ra a t 48 6
, q u o tin g Ka ra n v

. Au t o

– O w n e rs In s .,

su p ra a t 5 46

. It is a xio m a tic th a t th e p a rty a g a in st w h o m th e d o c trin e o f re s
ju d ic a ta is ra ise d a s a b a r to th e su b se q u e n t su it m u st h a v e ha d a fu ll a n d fa ir

o p p ortu n ity to litig a te th e issu e s in th e first a c tio n

. Fo wle r v

. Vin e y a rd
, 2 6 1 Ga

.

4 5 4
, 4 5 6 (1 ) (4 05 S E2 d 6 7 8 ) (1 9 9 1 ). Th u s, a t its c o re , re s ju d ic a ta c o n te m p la te s

a n a d v e rsa ria l p ro c e e d in g

. Lilly v

. He a rd
, 2 95 Ga

. 3 9 9, 4 0 2 (2 ) (a ) (7 6 1 S E2 d

4 6 ) ( 2 0 1 4 ). In d e e d
, th e e xiste n c e o f a n a d v e rsa ria l re la tio n sh ip b e twe e n c o

p a rtie s is a p re re q u isite fo r re s ju d ic a ta to a p ply

. Fe d e li v

. UAP/Ga

. A g

. Ch e m .,

2 3 7 Ga

. A pp

. 3 3 7
, 3 4 0 (2 ) (5 1 4 S E2 d 6 8 4 ) (1 9 9 9 ), q u o tin g Fo wle r v

. Vin e y a rd
,

su p ra a t 4 5 7 (3 ) (a ).

In th is c a se , th e Co u rt o f Ap p e a ls fo u nd th a t Bo stic k a n d th e CMM p a rtie s

we re p riv ie s, th a t is, th e re wa s a n id e n tity o f p a rtie s fo r th e p u rp o se o f re s
ju d ic a ta , a nd th e re fo re , Bo stic k wa s b o u n d b y th e ju d g m e n t in th e first la wsu it.

Bu t, th e CMM p a rtie s c o u ld n o t p ro p e rly a sse rt re s ju d ic a ta a g a i n s t th e ir o wn

p riv y

. In o rd e r t o sa tisfy th e id e n tity -o f-p a rtie s re q u ire m e n t fo r a p p lic a tio n o f

th e b a r o f re s ju d ic a ta , th e a lig n m e n t o f th e p a rtie s a s a d v e rsa rie s m ust b e th e

sa m e in b o th su its ; t h e p l a in tiff a n d d e fe n d a n t in th e su b se q u e n t a c tio n m u st

h a v e b e e n a dv e rsa rie s in th e p rio r su it, o th e rwise re s ju d ic a ta is in a p p lic a b le

.

5S e e 2 1 A F e d

. P ro c ., L. Ed
., § 5 1 :2 3 4 ( 2 0 1 5 ), c itin g He lle r Fin a n c ia l v

.

Gra mmc o Co m

p u te r S a le s , 71 F .3 d 5 1 8
, 2 8 U.C.C. Re p

. Se rv

. 2 d 1 3 4 3 (5 th C ir.

1 9 9 6). T h e o n ly a c tio n e xta n t wa s th e th ird -p a rty c o m pla in t f i le d b y Bo stic k

a g a in st th e CMM p a rtie s. S e e OCGA § 9 -1 1 -1 4 (a ). 4 T h is wa s so , re g a rd le ss o f

wh e th e r it wa s o n e fo r so le ly in d e mn ity o r in c lu de d d ire c t c la im s a g a in st th e

CMM p a rtie s. S e e OCGA § 9-1 1 -1 8

. 5 Th e su it by In g ra m a g a in st Bo stic k wa s

4 OCGA § 9-11-14 (a) provides:

W h en defendant may bring in third party . At any time after commencement of the action a defendant, as a third-party plaintiff, may cause a summons and complaint to b e served upon

a person n o t a p ar t y t o t he action who is or may be liable to him for a ll or part of the plaintiff' s claim ag ainst him. The third

- party plaintiff n eed not obtain leave to make the service if h e files the third-party complaint n ot later than ten d ay s after he serves his orig inal

answer

. Otherwise he must obtain leave on motion upon notice to all parties to the action. The p erson served with the summons and third-party complaint, hereinafter called the third-party defendant, shall make his defenses to the third-party p laintiff' s claim as provided in Code Section 9-11-12 a n d h i s counterclaims ag a inst the third-party plaintiff and cross-claims ag ainst other third-party defendants as provided in Code Section 9-11-13. The third-party defendan t may assert a g ainst the p laintiff any defenses which the third-party plaintiff has to the plaintiff 's c l a i m

. T he third-party defendant may a lso assert any claim
ag ainst the plaintiff arising out of the transaction or o ccurrence that is the subject matter of the plaintiff' s claim ag ainst th e t h i r d

- p a rty plaintiff. The plaintiff may assert any c laim ag ainst the third-party defendant arising out o f the transaction or occurrence that is the subject matter of the p laintiff' s c laim ag a inst the third-party plaintiff, a nd the third-pa rt y d e f

e ndant ther eupon shall assert his defenses as provided in Code Section 9 -11-12 and his counterclaims a

nd cross-claims as provided in Code Section 9 -11-13. Any party may move to strike the third-party claim, or for its severance or separate trial. A third-party defendant
may proceed under this Code section ag ainst a ny person not a party

to the action who is or
may be liable to him for a l l o r p art of the claim made in the action a g ainst the third-party defendant.

5 OCGA § 9-11-18 provides:

(a) J oinder o f claims. A party asserting a c laim to relief as a n orig inal claim, counterclaim, cross-claim, or third-party claim may join, either a s independent or as a l t e r n a t e claims, as

6c o n c lu d e d b y th e c o n se n t ju d g m e n t in fa vo r o f In g ra m

. 6 Th u s, B o stic k wa s th e

p a rty a g a in st wh o m th e d o c trin e o f re s ju d ic a ta wa s so u g h t to b e a p plie d
, in

o rd e r to e x tin g u ish th e th ird -p a rty c o m p la in t. 7 Bu t a s a p riv y o f th e CMM

p a rtie s, th e do c trin e c o u ld n o t b e a p p lie d a g a in st h im b e c a

u se of th e la c k o f a n

a d v e rsa ria l re la tio n sh ip in re g a rd to th e p rio r litig a tio n . Ev e n if Bo stic k is n o t

d e e m e d to be su c h a p riv y o f th e CMM p a rtie s, re s j u d i c a ta is n o t p ro p e rly

a sse rte d a g a in st h im b y th e CMM p a rtie s so a s to p re c lu d e B o stic k ’s th ird -p a rty

c o m p la in t b e c a

u se Bo stic k wa s n o t in v o lv e d in th e in itia l su it bro u g h t b y

In g ra m

. 8

many claims, leg a l or equitable, as he has ag ainst an opposing party

. (b) J oinde r o f r e medies; fraudulent convey ances. W henever a claim is one heretofore
cog niz able only after another claim has been prosecuted to a conclusion, the two c laims may be joined in a sing le a ction; b ut the court shall g rant relief in that action only in accordance with the relative substantive rig hts o f the parties. I n particular, a plaintiff may state a claim for money and a claim to h ave set aside a c onvey ance fr a u d ulent a s to h im without first having obtained a judg ment establishing the claim for money

.

6 I n its brief, the CMM p arties raise questions o f collusion between I ng ram and B ostick and the v alidity of the consent judg ment in reg ard to the third-party complaint; however, such issues are not within the confines of this Court’s g rant of certiorari.

7 The CMM parties urg e that plaintiff I ng r am was the party ag ainst whom it soug ht to invoke the bar o f r es judicata; however, even if such premise is accepted, it is plain from the opinion of the Court of App e a l s t h at its analy sis presumed that the doctrine was being invoked directly ag ainst third-party

plaintiff B ostick.

8 There is no finding that I ng ram and B ostick are in privity

.

7S im

p ly
, th e Co u rt o f Ap p e a ls e rre d wh e n it u ph e ld th e g ra n t o f su m m a ry
ju d g m e n t in fa v o r o f th e CMM p a rtie s a n d a g a in st Bo stic k o n th e b a sis th a t re s
ju d ic a ta wa s a b a r to Bo stic k a s th e CMM p a rtie s’ p riv y

. Ac c o rd in g ly
, th e c a se

is re m a n de d to th e Co u rt o f Ap p e a ls fo r re c o n sid e ra tio n in lig h t o f th is o p in io n

.

Ju d g m e n t re ve rse d a n d c a se re m a n de d . All th e Ju stic e s c on c u r.

8