IN THE SUPREME COURT OF MISSISSIPPI

NO. 2003-CA-02085-SCT

NEIL R. HARRISON AND JULIA A. HARRISON

v.

CHANDLER-SAMPSON INSURANCE, INC.

DATE OF JUDGMENT: 08/29/2003

TRIAL JUDGE: HON. WILLIAM E. CHAPMAN, III

COURT FROM WHICH APPEALED: MADISON COUNTY CIRCUIT COURT

ATTORNEYS FOR APPELLANTS: JAMES W. NOBLES, JR.

W. BRADY KELLEMS

ATTORNEYS FOR APPELLEE: DOUGLAS DREW MALONE

RICHARD M. EDMONSON

NATURE OF THE CASE: CIVIL - INSURANCE

DISPOSITION: AFFIRMED - 01/20/2005

MOTION FOR REHEARING FILED:

MANDATE ISSUED:

BEFORE COBB, P.J., CARLSON AND RANDOLPH, JJ.

CARLSON, JUSTICE, FOR THE COURT:

¶1. Neil R. and Julia A. Harrison, husband and wife, appeal to this Court from the Madison

County Circuit Court’s entry of a final judgment of dismissal on res judica ta grounds. Finding

no reversible error, we affirm.

FACTS AND PROCEEDINGS IN THE TRIAL COURTS

¶2. The Harrisons (referred to individually as Neil and Julia, for th e sake of clarity) owned

and operated two separate, but interactive, businesses. Their flagship venture, incorporated

under the name Service Air (“Service Air”), operated as a heating and air conditioning business1 Julia Harrison testified that the construction business was part of Service Air’s operations although

the building permits, deeds, financing and banking records are all in her name, not Service Air’s name.

2 Chandler Sampson also procured the Harrisons’ automobile and workers’ compensation policies.

2 for which the Harrisons served c oncurrently as directors, officers and shareholders. In

addition to her interest in Service Air, Julia worked in her own capacity as a homebuilder. This

separate business venture w as operated as a sole proprietorship under Julia’s exclusive

control. 1 In building her homes, Julia employed a homesteader strategy. Typically, the

Harrisons moved into the residences which Julia built, and, after a period of time, they sold

them in the real estate market. The Harrisons’ cooperative plan allowed their two business

ventures to work in concert with each other as Service Air provided the central air components

to Julia’s building projects. In relation to this contractual relationship, the Harrisons regularly

procured commercial general liability (“CGL”) insurance coverage for Service Air.

¶3. In 1992 the Harrisons again implemented their cooperative business plan and, pursuant

to their efforts to build their newest proje ct, obtained an insurance policy through ChandlerSampson Insurance, Inc. (Chandler-Sampson). 2 The policy was issued by Ohio Casualty

Insurance Company (“Ohio Casualty”) to Service Air on June 30, 1994. After two and half

years of residency in Julia’s newest home, the Harrisons placed the residence on the market.

In October of 1994, Dr. Fred L. McMillan bought the Harrisons’ house and shortly thereafter,

the hom e began to deteriorate as problems ranging from structural defects to foundational

flaws surfaced. On February 12, 1997, Dr. McMillan sued the Harrisons in the Circuit Court

of Madison County for breach of contract, breach of implied warranty, negligence and fraud.3 Great American provided automobil e insurance, general and commercial liability, and umbrella

coverage through American National for the Harrisons in the operation of Service Air.

4 State Auto Insurance Company provided the Harrisons’ homeowners coverage.

3 A jury trial resulted in a ver dict in the amount of $290,066 in favor of Dr. McMillan and

against the Harrisons, and on appeal this Court affirmed the c i rcuit court judgment. Harrison

v. McMillan , 828 So.2d 756 (Miss. 2002).

¶4. Following the McMillan judgment, the Harrisons filed two suits in the Madison County

Circuit Court against their insurers. In Cause No. CI-98-0074, Chandler-Sampson, Ohio

Casualty, and Great American Insurance Company 3 were nam ed as defendants and in Cause No.

CI-98-0111, Chand ler-Sampson, State Automobile Mutual Insurance Company, and State Auto

Property and Casualty Insurance Company 4 w ere named as defendants. In both complaints the

Harrisons asserted similar legal theories and claimed that Cha ndler-Sampson was liable for the

damages stemming from the McMillan judgment. Specifically, the Harrisons alleged that

Chandler-Sampson incurred liability when it refu sed to notify the liability insurance carriers

of the Harrisons’ potential lawsuit and for their subsequent refusal to defend the suit.

Concerning the defendant insurance carriers, the issue was whether the Harrisons’ breach of

their contract with Dr. McMillan fell within any of the specific areas of coverage provided by

each insurer.

¶5. The insurance carriers removed both cases to th e United States District Court for the

Southern District of Mississippi on a theory of fraudulent joinder. The insurance carriers

argued that the Harrisons did not have a cognizable claim against Chandle r-Sampson and that5 The Harrisons alleged a negligence theory for the first time in their motion to remand. In his opinion,

the federal district court judge refused to consider negligence since it was not pled in the complaint as of the

date the motion for removal was filed. C avallini v . State Farm Mut. Auto Ins. Co. , 44 F.3d 256, 264 (5 t h

Cir. 1995), citing Pullman Co. v. Jenkins , 305 U.S. 534, 537, 59 S. Ct. 347, 83 L. Ed. 334 (1939).

4 Chandler-Sampson h

ad been joined in the suit strictly for the purpose of destroying the federal

court’s diversity jurisdiction.

¶6. In both cases, the Harrisons filed a motion to remand to state court. The Harrisons

asserted that Chandler-Sampson was liable under Mississ ippi law and, as the procurer of the

poli cies in question, Chandler-Sampson incurred individual liability when it disclaimed its

liability under all

insurance policies and refused to undertake the defense of the McMillan suit.

Additionally, and for the first time, the Harrisons asserted that Chandl er-Sampson was jointly

liable with the several insurance carriers for negligence. 5

¶7. In considering the motions, the federal district court pierced the pleadings and

employed a summary-judgment-like procedure in order to determine whether the Harrisons

had any possibility of recovering agai n st the non-diverse party, Chandler-Sampson. The federal

district court acknowledg ed Chandler-Sampson’s status as that of an agent for a disclosed

pr incipal and reasoned that, in order to incur independent liability, an agent must act with gross

negligence, mali

ce or recklessness. The federal district court applied this standard and

determined that the Harr

isons asserted no cognizable claim, and that they were thus precluded

from recovering against Chandler-Sampson. Based on these findings, the federal district court

dismissed Chandler-Sampson from the suit as an improper party, retained jurisdiction, and

ultimately consolidated the two claims against the remaining insurance carriers. Several5

months later, after determining that the Harrisons’ judgment debt was not covered by the

companies’ insurance contracts, the federal district court grant ed summary judgment in favor

of the insurance carriers. H arrison v. Ohio Cas. Ins. Co., Inc.

, 519 F. Supp. 2d 518 (S.D. Miss.

2000). In 2002, the Fifth Circuit affirmed both the federal district court’s grant of ChandlerSampson’s motion to dismiss and its grant of the insurance carriers’ motions for summary

judgment. Harrison v. Ohio Cas. Ins. Co., No. 01-60386 (5th Cir. Jan. 8, 2002) (per curiam)

available at ftp://opinions.ca5.uscourts.

gov/unpub/01/01-60386.0.wpd.pdf.

¶8. On April 1 4, 1999, the Harrisons filed suit in the Madison County Circuit Court against

Chandler-Sampson. It is this suit from which the instant appeal arises. Under the auspices of

a new legal theory, the Harrisons claim that Chandler-Sampso n

, as their insurance agent, was

negligent in the writing of t h eir insurance coverage due to Chandler-Sampson’s failure to

assure that the relevant policies covered the McMillan claims.

¶9. I n response, Chandler-Sampson filed a motion for summary judgment as serting that it

was previously joined as a party-defendant in two prior cases which were rem oved to the

federal district court. Accordingly, in this motion, Chandler-Sampson raised the defense of

res judicata and argued that the bar was appropriate since the Harrisons’ cu rrent claim was fully

adjudicated on the merits in the federal district court action.

¶10. The Madison County Circuit Court granted summary jud gment in favor of Chandler

-

Sampson holding that the doctrin e of res judicata barred all issues which were raised or could

have been ra ised in the initial suit. It is from this final judgment that the Harrisons now appeal.6 DISCUSSION

¶11. We apply a de novo standard of review of a trial court’s grant or denial of a motion for

summary judgment. Satchfield v. R.R. Mo rrison & Son, Inc. , 872 So.2d 661,663 (Miss.

2004); McMillan v. Rodriguez

, 823 So.2d 1173, 1176-77 (Miss. 2002); Lewallen v.

Slawson

, 822 So.2d 236, 237-38 (Miss. 2002); J enkins v. Ohio Cas. Ins. Co.

, 794 So.2d 228,

232 (Miss. 200 1); Aetna Cas, & Sur. Co. v. Berry , 669 So.2d 56, 70 (Miss. 1996).

Accordingly, just like the trial court, this Court looks at all evidentiary matters in the record,

including admiss ions in pleadings, answers to interrogatories, depositions, affidavits, etc. Id.

at 70. The evidence must be viewed in the light most favorable to the party against whom the

motion has been made. Id

. If, in this view, the moving party is entitled to judgment as a matter

of law, summary judgment should forthwith be entered in his favor. Id

. When a motion for

summary judgment is made and supported as provided in M iss. R. Civ. P. 56, an adverse party

may not rest upon the mere allegations or denials of the p leadings, but instead the response

must set forth specific facts showing that there is a genuine issue for trial

. M iller v. Meeks

,

762 So.2d 302, 304 (Miss. 2000). If any triable issues of fact exist, the trial court's decision

t o grant summary judgment will be reversed. Otherwise, the decision is affirmed. Id. at 304.

I. WHETHER THE FEDERAL DISTRICT COURT’S REFUSAL TO

REMAND AND SUB SEQUENT DISMISSAL OF CHANDLERSAMPSON AS AN IMPROPERLY JOINED PARTY CONSTITUTED

A FINAL ADJUDICATION ON THE MERITS?7

¶12. The Harrisons’ threshold argument is that the federal district court’s denial of their

motion to remand was not an adjudication on the merits. They predicate this argument on their

interpretati

on of Fed. R. Civ. P. 41(b). The Harrisons assert that a Rule 41(b) involuntary

dismissal is strictly reserved for a fai lure to prosecute, a failure to comply with the rules of

civil procedure or a failure to comply with a court order. In applying this interpretation to the

federal district court’s fin al order finding inter alia that Chandler-Sampson was an improperly

joined p arty to the suit and that diversity of citizenship jurisdiction was preserved in

accordance with 28 U.S.C. § 1332, the Harrisons argue that the federal district court dismissal

was not one envisioned by Fed. R. Civ. P. 41(b) and t hus was not an adjudication on the merits.

The Harrisons as sert that a §1332 diversity inquiry, for purposes of removal under 28 U.S.C.

§ 1441, requires only that the federal judge review the case in orde r to determine whether

complete diversity exists.

¶13. Converse ly, Chandler-Sampson argues that the Harrisons’ interpretation is contrary to

the plain language of Rule 41(b). It argues that a court need not specify a dismissal to be either

with prejudice or without prejudice and to under gird this argument, Chandler-Sampson cites

a case from the Fifth Circuit to assert that a f ailure to specify whether the dismissal is with

prejudice o r without prejudice should be interpreted as an adjudication on the merits. N agle

v. Lee , 807 F.2d 435, 442 (5th Cir. 1987).

¶14. Fed. R. Civ. P. 41(b) states:

For failur e of the plaintiff to prosecute or to comply with these rules or

any order of court, a defendant may mov e for dismissal of an action or of any

c laim against the defendant. Unless the court in its order for dismissal oth erwise6 Quoting Restatement (Second) of Judgments § 19, Comment a , at 161 (1980).

8 specifies, a dis missal under this subdivision and any dismissal not provided for

in this rule, other than a dis missal for lack of jurisdiction, for improper venue,

or for failure to join a party under Rule 19 operates as an adjudication upon the

merits.

¶15. Rule 41(b) distinguishes between claims which are adjudicated on their merits and

claims that are disposed of due to the non-occurrence of a procedural techni cality. While Rule

41(b) enumerates three specific insta nces where a case may be dismissed before reaching its

substa nce, the rule contemplates more within its implicit exception. The United States

Supreme Court has previously addressed Rule 41(b)’s exception:

We regard the exception as encompassing those dismissals which are based on

a plaintiff's failure

to comply with a precondition requisite to the Court's going

forward to determine the merits of his substantive claim...[T]here must have

been a right adjudicated or relea sed in the first suit to make it a bar, and this fact

must appear affirmatively...[I]f the first suit was dis missed for defect of

pleadings, or parties, or a misconception of the form of proceeding, or the want

of jurisdiction, or was disposed of on any ground which did not go to the merits

of the action, the judgment rendered will prove no bar to another suit.

Costello v. United States

, 365 U.S. 265, 285, 81 S.Ct. 534, 544, 5 L.Ed.2d 551(1961).

Recently, in Semtek Int’l Inc. v. Lockheed Martin Corp

. , 531 U.S. 497, 501-02, 121 S.Ct

1021, 1025, 149 L.Ed.2d 32 (2001), the United States Supreme Court state d: “[t]he original

connotation of an ‘on the merits’ adjudication is one that actually ‘pass[es] directly on the

substance of a [particular] claim’ before the court. That connotation remains common to every

jurisdiction of which we are aware.” 6 Id. at 501-02, 121 S.Ct at 1025.9

¶16. In Hall v. Tower Land & Invest. Co.

, 512 F .2d 481 (5th Cir. 1975) the Fifth Circuit

reasoned that a trial court’s dismissal “under Fed.R.Civ.P. 12(b) fall s directly under the

wording of Rule 41(b), and cases have held that such decisions operate as adjudications on the

merits.” Id. at 483. In its conclusion, the Hall Court stated “that granting defendant's motion

to dismiss for plaintiff's failure to state a claim upon which relief can be granted operates as

an adjudication on the merits...” Id.

¶17. Fifth Circuit precedent regar ding a district court’s review of fraudulent joinder and

removal-type proceedings is categorical. Moreover, the burden of proving fraudulent joinder

is a heavy one. Cavallini v. State Farm Mut. Auto Ins. Co.

, 44 F.3d 2 56, 259 (5th Cir. 1995).

The removing party must prove that there is absolutely no possibility that the

plaintiff will be able to establish a cause of action ag ainst the in-state defendant

in state court, or that there has been outright fraud in the plaintiff's pleading of

jurisdictional facts.

Id.

, 44 F.3d at 259 (citing Green v. Am erada Hess Corp. , 707 F.2d 201, 205 (5th Cir.1983)).

A dist rict court is mandated to employ a summary judgment-like procedure for disposing of

t hese claims. Carriere v. Sears, Roebuck & Co.

, 893 F.2d 98, 100 (5th Cir. 199 0). In

Carriere, the Fifth Circuit explained:

While we have frequent ly cautioned the district courts against [pre-trying] a case

t o determine removal jurisdiction, we have also endorsed a summary judgmen t

like procedure for disposing of fraudul ent joinder claims. I n B., Inc. v. Miller

Brewing Co.

, we carefully discussed the procedures for assessing fraudulent

joinder claims and noted that "the proceeding appropriate for resolving a claim

of fraudulent joinder is similar to that used for ruling on a motion for summary

judg ment....” 663 F.2d 545 (5th Cir. 1981) The B

., Inc

. court expressly

authorized consideration of evi dence outside of the pleadings: In support of

th eir removal petition, the defendants may submit affidavits and deposition10

transcripts; and in support of their motion for remand, the plaintiff may submit

affidavits and deposition tran scripts along with the factual allegations contained

in the verified complaint...In short, the Fifth Circu i t treats fraudulent joinder

claims as capable of summary determination.

893 F.2d at 100. Furthermore, under Fifth Circuit precedent a district court must resolve all

questions of fact and conclude all ambiguities in the contro lling state law in favor of the nonremoving parties. Dodson v. Spiliada Maritime Corp.

, 951 F.2d 40, 42 (5th Cir. 1992)

. The

Fifth Circuit’s analysis ultimately requires the district court to “pierce the pleadings” and

determine wheth

er the non-removing party has any possible claim under applicable state law.

Carriere

, 893 F.2d at 100 (citing Keating v. Shell Chem. Co.

, 610 F.2d 328, 331 (5th Cir.

1980)).

¶18. In today’s case, the Hon orable Henry T. Wingate, Chief Judge for the United States

District Court for the Southern District of Mississippi, in a thorough opinion, reiterated Fifth

Circui t analysis and determined that it was clear Chandler-Sampson, in its capacity as an agent,

was not a part

y to the insurance contracts in question. Judge Wingate reasoned that the

Harrisons failed to provide the court with any authority which substantiated th e proposition that

an insurance a gent, who is not a party to the contract, owed a duty to defend under that contract.

Judge Wingate further stated that he was not persuaded by the Ha rrisons’ argument that

Chandler-Sampson’s decision to disclaim liability was made prior to any notice to the

insurance carriers. Judge Wingate concluded:

[T]he plaintiffs’ [Harrisons’] conclusory allegations are simpl y not substantiated

by any factual evidence.. .[i]t is clear that plaintiffs’ [Harrisons’] complaint does11

not state a cause of a ction against Chandler-Sampson for which Mississippi law

can remedy.

Importantly, in rendering its decision, the federal district court took note of the Harrisons’

failure to assert their negligence theory against Chandler-Sampson in their complaint as

originally filed with the circuit court. In line with Fifth Circuit precedent, a district court is

required to take the complaint as it existed at the time of the petition for removal. C avallini

,

44 F.3d at 265

. The federal district court concluded that the Harrisons’ legal theories could

not succeed against Chandler-Sampson and it accordingly dismissed Chandler-Sampson from

the suit. This interlocutory determination became final when it subsequently merged into the

final judgment dismissing the remaining case against the insurance carriers.

¶19. The requisite criteria for a judgment to be given effect as an adjudi cation on the merits

has been previously addressed by the United States Supreme Court and the Fifth Circuit. The

Supreme Court has drawn a line of demarcation in regards to Rule 41(b) and distinguishes

between cases that are decided on their merits and those which fail due to the existence of a

procedural defect. In C ostello

, the United States Supreme Court clearly reasoned that the

exce ption contained within Rule 41(b) encompasses dismissals which are based on a failure

to comply with a “precondition requisite” to a court’s deciding the case on i ts merits. 365 U.S.

at 285, 81 S.Ct. at 544.

¶20. In ruling on the motion to remand, the federal district court was mandated by precedent

to employ a summary judgment-like procedure in order to assess the viabi lity and substance

of the Harrisons’ claims. It determined that the Harrisons’ complaint did not state a cause of12

action against Chandler-Sampson for which Mississippi law could provide a remedy. The

federal district court’s final analysis recognized that the Harrisons were procedurally barred

from r aising their only cognizable claim, that being one for negligence. It is clear that the

federal district court applied the prope r legal standard, gleaned the record for any possibility

of recovery, and ultimately determined that the Harrisons had failed to state a claim against

Chandler-Sampson upon which relief c o uld be granted. Accordingly, the federal district court

judge issued a final adjudication on the merits.

II. WHETHER THE CIRCUIT COURT’S GRANTOF CHANDLERSAMPSON’S MO TION FOR SUMMARY JUDGMENT BASED ON

RES JUDICATA GROUNDS WAS PROPER?

¶21. The Harrisons argue that the Circuit Court of Madison Count y erred in holding that their

present action was barred by res judicata. They urge that the circuit court misapprehended the

distinction between insurance coverage vel non, and the agent’s d uty to procure proper

insurance coverage. The Harrisons seek to differentiate between the federal district court’s

dismissal, which included o nly those claims arising out of the insurers’ alleged breach of

contract, a n d the claims which they now assert in state court regarding their agent’s negligence.

They further argue that the action did not accrue until after the federal district court determined

that there was no coverage by the Ohio Casualty and Great American policies for indemnity

or defense.

¶22. Res judicata, as a doctrine of claim preclusion, has two functions. Under the principle

known as “bar,”res judicata preclu des claims which were actually litigated in a previous action.7 2 Jeffrey Jackson & Mary Miller, Encyclopedia of Mississippi Law §14:6, p. 350 (2001)

13 Under the principl

e known as “merger,” res judicata prevents subsequent litigation of any claim

that should have been litigated in a previous action. 7 The United States Supreme Court has

succinctly held, “[r]es judicata prevents litigation of all grounds for, or defenses to, recovery

that were previously available to the parties, regardless of whether they were asserted or

determined in the prior proceeding.” Brown v. Felsen

, 442 U.S. 127, 131, 99 S.Ct. 2205,

2209, 60 L.Ed.2d 767 (1979). Likewise, this Court has been clear in regards to our

application of the doctrine of res judicata, and we have held “‘that when a court of competent

juris diction enters a final judgment on the merits of an action, the parties or their privies are

precluded from re-litigating claims that were decided or could have been raised in that action.’”

Miss. Dep’t of Human Services v. She lby , 802 So.2d 89, 95 (Miss. 2001) (citing A etna Cas.

& Ins. Co. v. Berry , 669 So.2d at 66).

¶23. Res judicata is fundamental to the eq uitable and efficient operation of the judiciary and

“reflec ts the refusal of the law to tolerate a multiplicity of litigation.” L ittle v. V & G Welding

Supply, Inc. , 704 So.2d 1336, 1337 (Miss. 1997).

It is a doc trine of public policy “designed to avoid the `expense and vexation

attending multiple lawsuits, conserve judicial resources, a nd foster reliance on

judicial action by minimizing the possibili ties of inconsistent decisions.’”

Montana v. United States

, 440 U.S. 147, 153-54, 99 S.Ct. 970, 973-74, 59

L.Ed.2d 210 (1979).

The courts can not revisit adjudicated claims and “all grounds for, or defenses to recovery that

were available to the part ies in the first action, regardless of whether they were asserted or14

determined in th

e prior proceeding, are barred from re-litigation in a subsequent suit under the

doctrine of res judicata.” Alexander v. Elzie , 621 So. 2d 909, 910 (Miss. 1992).

¶24. For the bar of res judicata to a pply in Mississippi there are four identities which must

be present: (1) identity of the subject ma tter of the action; (2) identity of the cause of action;

(3) identity of the parties to the cause of action; and (4) identity of the quality or character of

a person against whom the claim is made. Quinn v. Estate of Jones

, 8 18 So.2d 1148, 1151

(Miss. 2002); Dunaway v. W.H. Hop per & Assocs., Inc. , 422 So.2d 749,751 (Miss. 1982).

We have held th

at the absence of any one of the elements is fatal to the defense of res judicata.

Estate of Anderson v. Deposit Guar. Nat’l Bank , 674 So.2d 1254, 1256 (Miss. 1996).

¶25. The four requis ite identities of claim preclusion are well-grounded in Mississippi

jurisprudence and are dispositive i n the instant appeal. Here, all four identities are present and

require that res judicata bar the Harrisons’ current claim.

(1) Identity of the subject matter of the action.

¶26. The doctrine of res judicata bars a second action between the same parties o n the same

subject matt

e r directly involved in the prior action. In the instant appeal, the subject matter of

the federal suit

and the subject matter of the present state civil action are the same. The

subject matter in each case directly involves the written instruments that constitute the

Harrisons’ insurance policies. Specifically, the substance of the both lawsuits is founded on

Chandler-Sampson’s relationship to this policy.

(2) Identity of the cause of action.8 See Miss. R. Civ. P. 2 cmt.

15 ¶27. This identity, which has proven to be difficult to apply, requires that the “cause of

action” be the same. As an initial note, Miss. R. Civ. P. 2 was specifically promulgated to

relieve confusi

on as to the term “cause of action.” The purpose of the rule was to replace

“cause of action” with “claim” or “claim for relief”, and therefore provide our courts with “the

free dom and authority to deal pragmatically with any aggregate of operative fact which gave

rise to a right enforcea

ble in the courts, consistent with the jurisdiction of the courts.” 8 In

cases involving claim preclusion, this distinction is indeed very important and requires that the

parties, as well as the courts, distinguish between what body of fact constitutes a claim and

what legal theories attach to that body of fact.

¶28. The rules of civil procedure, both Mississippi and federal, alleviate any penalty by

allowing for both liberal joinder of “claims” and attachment of theories in support of claims.

In interpreting R

ule 18(a) and Rule 8(e)(2), Professors Wright, Miller and Kane acknowledge

that the concept of a claim is “an inherently amorphous one” and prescribe that:

Because of the uncertainty as to precis ely what the term ‘claim’ means as used

in Rule 1 8 (a), a pleader generally will not be penalized if the court determines

that the allegations in the complaint are misdesignated as multiple theories in

su pport of a single claim rather than as independent claims or if the pleader

made precisely the opposite mistake. Furthermore once the court concludes

that Rule 18(a) does not apply because only a single claim has been pleaded,

Rule 8(e)(2), which makes it clear that pleading different theories is

permissible, may be invoked to uphold the pleader’s method o f presentation...In

short the two rules are so comprehensive in their coverage that it is impossible

to conceive of a joinder claim or theory situation that would not fall within the

protection of one of them.9 1 Jeffrey Jackson, Mississippi Civil Procedure §16:11 (2004)

16 6A Wright, Miller,& Kane, Fe deral Practice and Procedure: Civil 2d § 1584 (1990) (cited in

Miss. R. Civ. P. 18 cmt.).

¶29. The procedural impetus created by allowing parti es to assert all possibilities for

recovery and, in essence, blueprint their suit with numerous cla i ms and legal theories, is

bu ttressed by the specter of claim preclusion. Res judicata serves as a mandatory device for

claim joinder by restricting the claims which a party may refrain from asserting against the

opposing party. 9 According to Professors Wright, Miller and Kane, “[t]he possibility of being

barred from asserting a particular claim in a second suit undoubtedly has an in terrorem effect

and encourages cau

tious attorneys to join claims...” 6A Wright, Miller & Kane, Federal

Practice and Pro cedure: Civil 2d § 1582 (1990). The ramifications of splitting a claim among

two or more suits were outlined by this Court in A lexander when we stated that “[r]es judicata

and the issue of splitting a cause of action are closely related.” Id

. at 910. Citing language

from Restatement (First) of Judgments §62 (1942), we further stated in Alexander :

Where a judgment i

s rendered, whether in favor of the plaintiff or the defendant,

which precludes the plaintiff from thereafter maintaini ng an action upon the

original c ause of action, he cannot maintain an action upon any part of the

original cause of action, alth ough that part of the cause of action was not

litigated in the original action, except * * *” (c) where the def endant consented

to the splitting of the plaintiff's cause of action.

Id

. at 910.10 See 18 Moore’s Federal Practice 3d § 131.12 (2004).

17 ¶30. In Hayes v. Solomon

, 597 F.2d 958, 982 (5th Cir. 197 9), the Fifth Circuit also

addressed the practice of claim-splitting and stated, “t his principle prohibiting [re-litigation]

requires that

a plaintiff bring in the first forum every point which properly belongs to the

subject of litigation, and which the parties, by exerc ising reasonable diligence, might have

brough t forward at the time.” I d. at 982. The Fifth Circuit, referencing Professor Moore’s

treatise on civil procedure, likewis e stated “[i]n accordance with public policy, partially to

conserve the courts’ time but probably in the main to prevent the hardship upon [a] defendant

of unnecessary piecemeal litigation, a single c ause of action cannot be split so as to be

properly made the subject of different actions...” 10 Id. at 982. A party is encouraged to plead

all claims on the front end so as not to be precluded from so pleading on the back end, as

expressed in the first sentence of the Comment to Miss. R. Civ. P. 18, which states: “The

purpose of Rule 18 is to eliminate pie cemeal litigation by permitting liberal joinder of

claims.”

¶31. In o rder for res judicata and the ban on claim-splitting to take effect, the litigation must

involv e the same claim premised upon the same body of operative fact as was previously

adjudicated. As stated earlier, this distinction can be difficult to make, especially, when a case

involves several different legal theories which apply to on e claim. When faced with this

enigma, this Court has looked past the legal bases ass erted and relied more on the factual and

transactional relationship between the original action and the subsequent action. The18

transactional approach, whic h is specified in the Restatement (Second) of Judgments (1982)

and has been referenced by the United States Supreme Court in Nevada v. United States

, 463

U.S. 110, 103 S.Ct. 2906, 77 L.Ed.2d 509 (1983), states that:

causes of ac tions are the same if they arise from the same “transaction”; whether

they are products of the same “transaction” is to be determined by “giving weight

to such consid erations as whether the facts are related in time, space, origin, or

motivation, whether they form a convenient trial unit, and whether their

treatment as a unit conforms to the parties' expec tations or business

understanding or usage.”

Id. at 131 (citing Restatement (Sec ond) of Judgments § 24 (1982)). In W alton v. Bourgeois

,

512 So. 2d 698, 702 (Miss. 1987), this Court barred an un successful tort plaintiff in a medical

malpractice su

it from re-litigating her claim under a new legal theory of breach of contract.

Id. at 702. In determining that the claims were indeed the same, this Court explained that

identity b etween claims exists “when the underlying facts and circumstances are the same [in

t h e second suit] as those involved in the first suit.” Id. at 701. We reasoned that “[t]he primary

right and duty asserted and the primary wrong complained of were the same in each act ion” and

found th at “[o]nly the legal bases advanced for relief were arguably different.” I d

. at 702. In

Walton

, this Court ultimately found that breach of contract was a ground which should have

been asserted in the parties’ first suit inasmuch as “[i]t was a claim that might have been

litigated in the previous lawsuit and, indeed, it should have been.” Id

.

¶32. In Aetna Cas. & Sur. Co. v. Berry

, anoth er case evidencing this Court’s same claim

requirement, Ms. Berry brought three concurr ent actions in federal court against her husband’s19

insurance carriers demanding coverage under her husband’s uninsured motorist policies. 669

So.2d at 66. After the three cases were consolidated, Ms. Berry requested the trial court to

allow her to amend her federal court complaint and include an additional allegation premised

on the intentional tort of “bad faith” because two of the insurers wrongfully denied coverage.

The federal court case resulted in a judgment of $30,000 and a determination that Mr. Berry

was only covered at the statutory minimum in regards to her husband’s uninsured motorist

policy with Aetna. Two years after the conclusion of her first case, Ms. Berry filed a second

act ion in state court where she sought to establish the tort liability of the uninsured motorist.

Additionally , Ms. Berry renewed her bad faith claim against Aetna, this time including

allegations that she had been injured financially by Aetna through its agent’s negl igence and its

own fraud. The state court case ultimately resulted in a large monetary judgment against Aetna,

w hich Aetna appealed to this Court on res judicata grounds. On appeal, Ms. Berry argued that

since her bad faith allegation was ne ver ruled on by the federal court res judicata could not

apply. In finding that res judicata precluded Ms. Berry’s bad faith claim, we reasoned that the

“two claims stem from a common nucleus of operative fact and eve n assuming arguendo that

she did not rais e bad faith and medical damages claims in the district court case, it is clear that

she could have.” 669 So.2d at 69. Additionally, this Court concluded that Ms. Berry’s claims

against Aetna’s agent were barred as well: “The facts surrou nding the issuance of the policy

were litigated in the district court suit against Aetna. That was the forum in which Ms. Berry

should have asserted that Aetna was liable for Young’s [agent’s] negligent failure to inform Mr.

Berry about UM coverage.” Id

. at 69-70.20

¶33. The Fifth Circuit applies a similar anal ysis when determining whether a claim should

have been included in prior litigation. In S mith v. Safeco Ins. Co.

, 863 F.2d 403 (5th

Ci r.1989), the plaintiff first brought suit in federal district court for punitive damages under

an insurance contract for the insurer's refusal to pay a claim under the policy for medical

expenses. On appeal, the Fifth Circuit held that res judicata barred the second suit in which the

plaintiff sought to collect under-insured motorist benefits under the same insurance policy.

The Fifth Circuit applied the Restatement on Judgment’s transaction test and stated:

Applying this rule, [plaintiff’s] first action extingui shed all of [plaintiff’s] claims

against Safeco “with respect to all or any part of the transaction, or series of

connected transactions, out of which the actio n arose.” Restatement (Second)

of Judgments §24 (1982). All of Smith's claims against Safe co sought coverage

under a single insurance policy for injuries resulting fro m one accident. These

claims arose out of a common nucleus of operative fact , and comprised one

transaction. Smith was required to bring all of his claims or causes of action

against Safeco that arose out of the crash. Hi s second action against Safeco is

precluded.

Smith , 863 F.2d at 404.

¶34. In this appeal, the Harrisons have renewed t heir claim for relief based on a theory of

negligence. The Harrisons’ present claim involves the same body of evidence that gave rise

to their initial suit. There was but one transaction and likewise one injury in this case. The

Harrisons’ initial suits involving their l ocal agent, Chandler-Sampson, was made up of two

concurrent actions. Both claims were derived from the written instruments that represented

the Harrison

s’ insurance coverages and both claims sought recovery by way of indemnification

in order to satisfy the debt incurred as a result of the McMillan judgment. The federal district

court fully evaluated the Harrisons’ two claims and determined that the Harrisons had failed21

to plead a single viable t heory of recovery against Chandler-Sampson. The federal district

court appropriately dismissed their claims and consolidated the actions.

¶35. Now, in this successive suit, the Ha rrisons seek recovery by way of the same written

instrument involved in the earlier suit aga inst the same defendant, seeking the same relief for

the same injurie s in the same court, based on the same transaction. The only difference

between the current and prior suits is the legal bases on which they are grounded. Accordingly,

the Harrisons seek to proceed under a theory of negligence and shoot the arrow t hat was left

in their quiver following the dismissal of their first suit against Chandler-Sampson. The law

is well settled that “where one has a choice of recov ery for a given wrong, they may not assert

them serially in successive actions but must advance all at once on pain of the bar of res

judicata.” Walton

, 512 So. 2d at 702. The rule stated by the American Law Institute is that res

judicata, as a doctrine of claim preclusion, serves “to extinguish a claim by the plaintiff against

the defendant even

though the plaintiff is prepared in the second action (1) To present evidence

or grounds or theories of the case not presented in the first action, or (2) To seek remedies

or forms of relief not demanded in the fir st action.” Restatement (Second) of Judgments §25

(1982).

¶36. The plaintiff is provided with the benefit of the procedural mechan ism at the outset

of

suit. Moreover, the plaintiff is afforded the option of attaching multiple legal theories to an

individual claim, of attaching multiple claims to an individual suit and, ultimately, of attaching

the suit to several defendants. It follows that the very doors to the courthouse that are so wideopen at the beginnin

g of suit must be closed tightly upon final adjudication. Accordingly,22

plaintiffs must proceed with a w atchful eye on claim preclusion and claim splitting, and

consider the full gamut of their claim

, in regards to the bod y of operative fact to which it

attaches, an

d, additionally, determine the legal theories that will best support this claim.

Plaintiffs must proceed with “reasonable diligence.” H ayes

, 597 F.2d at 982. To allow a

plaintiff to breathe life into a claim by way of a new theory for recovery, and re suscitate that

which had previously been fully adjudicated, would run contrary to the maintenance of an

effective judicial system. While the result is harsh, allowing the Harrisons to re-visit the same

transaction and assert negligence in a second successive action would be to endorse gardenvariety claim-splitting.

3. Identity of the parties to the cause of action.

¶37. “To satisfy the identity [of parties] element, strict identity of the parties is not

necessary. A non-party defendant can assert res judicata so long as it is in “privity” with a

named defendant.” R ussell v. SunAmerica Secs., Inc.

, 962 F.2d 1169, 1173 (5 t h Cir. 1992)

(citin g Nevada v. United States , 463 U.S. 110, 129, 103 S. Ct. 205, 77L.Ed. 2d 509 (1983)).

In the present case the identical parties are involved. In both suits the Harrisons named

Chandler-Sampson in its capacity as the insurance agent who wrote the Harrisons’ policy.

4. Identity of

the quality or character of a person against whom the

claim is made.

¶38. In today’s case, the character and status of Chandler-Samps on has remained intact. It

is the same company which was named in the two pr ior lawsuits filed by the Harrisons in the

Circuit Court of Madison County and, subsequently removed to federal distri ct court.23

Chandler-Sampson remains a separate corporation doing business in the state of Mississippi,

and William S. Sampson remains its agent for service of process.

CONCLUSION

¶39. The Circuit Court of Madison County properly granted summary judgment in favor of

Chandler-Sampson and against Neil and Julia Harrison based on a finding of res judicata. In

the Harrisons’ first action against Chandler-Sam pson, the federal district court applied a

thorough summary judgment-like pr o cedure, gleaned the record and concluded that the

Harrisons failed to assert a caus e of action against Chandler-Sampson for which Mississippi

law could provide a remedy. We find that this ruling was a final adjudication on the merits.

Furthermore, we find that the four identities which are prerequisite to the preclus ion of a claim

on res judicata grounds are present, a nd that the Harrisons’ current action is barred. We thus

affirm the final judgment of the Circuit Court of Madison County.

¶40. AFFIRMED.

SMITH, C.J., COBB, P.J., EASLEY, GRAVES, DICKINSON AND RANDOLPH,

JJ., CONCUR. WALLER, P.J., AND DIAZ, J., NOT PARTICIPATING.