Present: Hassell, C.J., Lacy, Keenan, Koontz, Kinser, and 

Lemons, JJ., and Carrico, S.J.*

ANITA LEE DAVIS 

 OPINION BY CHIEF JUSTICE LEROY R. HASSELL, SR. 

v. Record No. 020421 February 28, 2003 

MARSHALL HOMES, INC. AND 

MARSHALL MEREDITH, INDIVIDUALLY 

FROM THE CIRCUIT COURT OF THE CITY OF VIRGINIA BEACH 

Robert B. Cromwell, Jr., Judge 

I. 

 In this appeal, we consider whether the doctrine of res

judicata bars a plaintiff's action to recover damages because 

of the defendants' alleged failure to pay deed of trust notes 

when the plaintiff had unsuccessfully filed a prior motion for 

judgment for actual fraud against the defendants. 

II. 

 In 1999, plaintiff, Anita Lee Davis, filed a motion for 

judgment against Marshall Meredith, Inc., Marshall Homes, 

Inc., Marshall Meredith, individually, Perpetual Homes, Inc., 

and John M. Scott. Plaintiff pled in her motion for judgment 

that these defendants committed acts of actual fraud against 

her. 

 Plaintiff alleged that on several occasions in 1995 she 

loaned money to defendants for the purpose of purchasing 

 * Chief Justice Carrico presided and participated in the 

hearing and decision of this case prior to the effective date 

of his retirement on January 31, 2003. 
various real properties that defendants agreed to refurbish 

and sell for a profit. Plaintiff alleged that defendants 

intentionally misrepresented to her the value of the real 

properties and deceived her because even though they told her 

that they would "refurbish" each property, defendants never 

intended to do so. Plaintiff stated in her motion for judgment 

that "[a]t the time of each request [by defendants] for a loan 

and representation as to the value of each real estate, the 

defendants knew that the actual value of the real estate was 

less than what they represented to the plaintiff, and as a 

result of this misrepresentation, the plaintiff lent them 

money for the purpose of the defendants purchasing the 

property, with additional funds available for refurbishing the 

property, at a 10% rate of interest. Further, not only did 

the defendants know that the value of the property was 

substantially less than what they had represented, they also 

knew at the time of the purchase that they were not going to 

refurbish the property and/or sell it for profit resulting in 

the plaintiff being left with the property and an outstanding 

Note based on an inflated property value." 

 Plaintiff stated in her motion for judgment that she 

sought "judgment against the defendants, jointly and 

severally, in the amount of $528,486.00 representing the 

 

2
amount of the inflated price of the real estate, $250,000.00 

in punitive damages, attorney's fees, pre and post judgment 

interest and any and all other costs expended herein." 

Subsequently, plaintiff's motion for judgment for actual fraud 

was dismissed with prejudice against defendants Marshall 

Meredith, Inc., Marshall Homes, Inc., and Marshall Meredith, 

individually. 

 In 2001, plaintiff filed her present action. She alleged 

in her amended motion for judgment that Marshall Homes, Inc., 

and Marshall Meredith, individually, executed four separate 

deed of trust notes and that these defendants "failed and 

refused to make any payments on the [notes]" and that the 

defendants "surrendered" the properties that secured the deed 

of trust notes to plaintiff. Plaintiff alleged that she 

"spent money to improve the properties for sale and incurred 

net losses . . . after the sale of each property." Plaintiff 

requested a "judgment against the defendants, jointly and 

severally, in the amount of One Hundred Sixty Four Thousand, 

Two Hundred Twenty Dollars and Seventy Six Cents 

($164,220.76), plus interest at 10% per annum through date of 

sale, as well as interest accruing thereafter on the loss at 

9% per annum, attorney's fees, and any and all other costs 

expended herein." 

3
 Defendants filed a plea of res judicata and asserted that 

plaintiff's action was barred because the circuit court had 

entered an order that dismissed with prejudice her prior 

action for actual fraud. Defendants argued that the factual 

allegations and damages claimed in the fraud action were based 

upon the same facts and damages described in the breach of 

contract action. The circuit court agreed with the defendants 

and entered an order that sustained the plea of res judicata

and dismissed plaintiff's action with prejudice. Plaintiff 

appeals. 

III. 

A. 

 The principles that this Court must apply to our 

resolution of this appeal are well established and familiar. 

We have repeatedly stated that "[t]he bar of res judicata

precludes relitigation of the same cause of action, or any 

part thereof, which could have been litigated between the same 

parties and their privies." Smith v. Ware, 244 Va. 374, 376, 

421 S.E.2d 444, 445 (1992). Accord Scales v. Lewis, 261 Va. 

379, 382, 541 S.E.2d 899, 901 (2001); Flora, Flora & Montague, 

Inc. v. Saunders, 235 Va. 306, 310, 367 S.E.2d 493, 495 

(1988); Bates v. Devers, 214 Va. 667, 670-71, 202 S.E.2d 917, 

920-21 (1974). We have consistently held that a litigant who 

seeks to bar a claim based upon the defense of res judicata

4
must establish four elements: identity of the remedy sought; 

identity of the cause of action; identity of the parties; and 

identity of the quality of the persons for or against whom the 

claim is made. State Water Control Bd. v. Smithfield Foods, 

Inc., 261 Va. 209, 214, 542 S.E.2d 766, 769 (2001); Balbir 

Brar Assoc., Inc. v. Consolidated Trading and Serv. Corp., 252 

Va. 341, 346, 477 S.E.2d 743, 746 (1996); Wright v. Castles, 

232 Va. 218, 222, 349 S.E.2d 125, 128 (1986). 

 We have also stated that: 

"The judicially created doctrine of res judicata

rests upon public policy considerations which favor 

certainty in the establishment of legal relations, 

demand an end to litigation, and seek to prevent the 

harassment of parties. . . . The doctrine prevents 

'relitigation of the same cause of action, or any 

part thereof which could have been litigated, 

between the same parties and their privies.' . . . 

A claim which 'could have been litigated' is one 

which 'if tried separately, would constitute claimsplitting.' 

 " 'Claim-splitting' is bringing successive 

suits on the same cause of action where each suit 

addresses only a part of the claim. Jones v. Morris 

Plan Bank of Portsmouth, 168 Va. 284, 291, 191 S.E. 

608, 610 (1937). Courts have imposed a rule 

prohibiting claim-splitting based on public policy 

considerations similar to those underlying the 

doctrine of res judicata: avoiding a multiplicity 

of suits, protecting against vexatious litigation, 

and avoiding the costs and expenses associated with 

numerous suits on the same cause of action." 

Bill Greever Corp. v. Tazewell Nat'l Bank, 256 Va. 250, 254, 

504 S.E.2d 854, 856-57 (1998). 

5
 The doctrine of res judicata only applies if the cause of 

action a plaintiff asserts in the pending proceeding is the 

same as the cause of action asserted in the former proceeding. 

City of Virginia Beach v. Harris, 259 Va. 220, 229, 523 S.E.2d 

239, 243 (2000). And, the litigant who asserts the defense of 

res judicata has the burden of proving by a preponderance of 

the evidence that the claim is precluded by a prior judgment. 

Scales, 261 Va. at 383, 541 S.E.2d at 901. 

 Applying these well-established principles, we hold that 

the circuit court erred in concluding that plaintiff's cause 

of action for breach of contract is barred by the doctrine of 

res judicata. As we have already stated, the litigant who 

asserts the doctrine of res judicata as a bar to the 

plaintiff's claim must show, among other things, the "identity 

of the cause of action." In this case, defendants cannot 

satisfy this requirement. 

 In her first cause of action, plaintiff alleged acts of 

actual fraud on the part of the defendants. The basis of 

plaintiff's actual fraud claim was that she was damaged 

because of her reliance upon defendants' misrepresentations of 

the values of collateral that secured the deed of trust notes. 

We have held "that a 'litigant who prosecutes a cause of 

action for actual fraud must prove by clear and convincing 

evidence: (1) a false representation, (2) of a material fact, 

6
(3) made intentionally and knowingly, (4) with intent to 

mislead, (5) reliance by the party misled, and (6) resulting 

damage to the party misled.' " Prospect Dev. Co., Inc. v. 

Bershader, 258 Va. 75, 85, 515 S.E.2d 291, 297 (1999) (quoting 

Bryant v. Peckinpaugh, 241 Va. 172, 175, 400 S.E.2d 201, 203 

(1991)); accord Richmond Metro. Auth. v. McDevitt Street 

Bovis, Inc., 256 Va. 553, 557-58, 507 S.E.2d 344, 346 (1998); 

Evaluation Research Corp. v. Alequin, 247 Va. 143, 148, 439 

S.E.2d 387, 390 (1994); Winn v. Aleda Constr. Co., Inc., 227 

Va. 304, 308, 315 S.E.2d 193, 195 (1984). 

 A review of the motion for judgment in the fraud action 

reveals that plaintiff would have been required to establish 

by clear and convincing evidence that defendants approached 

her and requested loans for the purpose of refurbishing and 

selling the real properties for a profit, defendants 

misrepresented the values of the real properties, plaintiff 

relied upon defendants' misrepresentations and loaned funds to 

defendants for the purchases of the real properties, 

defendants purchased the properties at their actual values, 

defendants never intended to honor their promises to plaintiff 

that they would "refurbish and sell the properties," and 

plaintiff incurred damages related to the misrepresentations. 

 In her later contract action to recover for losses 

sustained because of defendants' failure to pay the deed of 

7
trust notes, plaintiff would have been required to prove, by a 

preponderance of the evidence, the existence of the notes, the 

defendants' failure to pay the notes, and damages. 

 We reject defendants' contention that plaintiff only had 

one cause of action, and that plaintiff improperly split her 

single cause of action because the "same evidence" was 

necessary to prove plaintiff's fraud and breach of contract 

claims. Defendants are incorrect for numerous reasons. This 

Court held in Brown v. Haley, 233 Va. 210, 216, 355 S.E.2d 

563, 567 (1987), that "[t]he test to determine whether claims 

are part of a single cause of action is whether the same 

evidence is necessary to prove each claim." Application of 

this test compels us to conclude that plaintiff did not split 

her causes of action. 

 In her fraud action, plaintiff would have had to present 

evidence of the deed of trust notes and defendants' failure to 

satisfy those notes to show that she was damaged as a result 

of the misrepresentations. However, this evidence does not 

satisfy the remaining elements that plaintiff would have had 

to prove to establish a prima facie case of actual fraud by 

clear and convincing evidence. The mere fact that some

evidence relevant in plaintiff's action for fraud may be 

relevant to prove her distinct and separate contract claim for 

nonpayment of the deed of trust notes does not, for purposes 

8
of res judicata, mean that plaintiff only has one cause of 

action. Evidence of defendants' failure to satisfy the deed 

of trust notes does not prove that defendants made false 

representations of the values of the real properties 

intentionally and knowingly, with the intent to mislead 

plaintiff. Evidence of defendants' failure to satisfy the 

deed of trust notes does not establish plaintiff's reliance 

upon defendants' alleged misrepresentations. 

 It is a fundamental principle of jurisprudence that 

evidence which is not relevant is not admissible. Most of the 

evidence necessary to prove plaintiff's fraud action would 

have been inadmissible at a trial of plaintiff's contract 

action because of the lack of relevance. Surely, the circuit 

court would have committed error during a jury trial of 

plaintiff's contract action had the court permitted plaintiff 

to present evidence of defendants' acts of actual fraud. 

 Additionally, much of the evidence that plaintiff would 

have to present to establish damages in her breach of contract 

action is different from and not relevant to the damages she 

alleged in her fraud case. In her fraud action, plaintiff 

sought to recover damages based upon defendants' alleged 

misrepresentations of the values of the collateral that 

secured the deed of trust notes, and she sought punitive 

damages. In contrast, in plaintiff's breach of contract case, 

9
she sought to recover money spent to improve the real 

properties and net losses she incurred after she sold the 

properties that she received from defendants in lieu of 

foreclosure. 

 Our prior decisions plainly illustrate the principle that 

a plaintiff's assertion of separate and distinct causes of 

action will defeat a defense of res judicata. For example, in 

Brown v. Haley, supra, we considered whether the doctrine of 

res judicata barred the plaintiffs' suit to enforce an implied 

easement. 233 Va. at 212, 355 S.E.2d at 565. In that case, 

Rufus R. Brown and Sallie W. Brown filed an action at law for 

ejectment against the defendants and/or their privies. The 

Browns alleged in the ejectment action that Dayton A. Haley 

and Lucy S. Haley had no interest in certain land. The 

circuit court ruled that the Browns were entitled to "sole 

possession" of the land. Subsequently, the Haleys filed an 

amended motion for declaratory judgment and bill of complaint 

against the Browns and requested that the circuit court 

declare that the Haleys possessed an easement to cross the 

Browns' land. The circuit court held that the Haleys had an 

implied easement over the Browns' land. The Browns argued 

before this Court that the doctrine of res judicata barred the 

maintenance of the Haleys' suit for the declaration of an 

10
implied easement because of the prior ejectment action. Id.

at 213-15, 355 S.E.2d at 566-67. 

 We observed in Haley that a judgment in favor of a 

litigant bars relitigation of the same cause of action and any 

part thereof that could have been litigated between the same 

parties and their privies, but we explained that "[t]he 

barring of a cause of action 'which could have been litigated' 

is not directed to an unrelated claim which might permissibly 

have been joined, but, to a claim which, if tried separately, 

would constitute claim-splitting." Id. at 215-16, 355 S.E.2d 

at 567 (quoting Bates, 214 Va. at 670-71 n.4, 202 S.E.2d at 

920-21 n.4). 

 We stated that "[t]he test to determine whether claims 

are part of a single cause of action is whether the same 

evidence is necessary to prove each claim." Haley, 233 Va. at 

216, 355 S.E.2d at 567. Applying this test, we held that the 

doctrine of res judicata did not bar the Haleys from 

prosecuting their suit to establish an implied easement. We 

emphasized that ejectment is an action at law to determine 

title and the right of possession of real property, whereas an 

easement is a privilege to use the land of another in a 

particular manner and for a particular purpose. We held that 

the existence of an easement is not relevant to the issue of 

title. We observed that ejectment involves ownership rights 

11
and the proof necessary to establish this action generally 

consists of documents that vest title, whereas the proof 

necessary to establish the existence of an implied easement 

generally consists of facts that gave rise to the easement. 

Id. at 215-17, 355 S.E.2d at 567-68. 

 We noted that the elements that the Haleys were required 

to prove to establish their claim of an implied easement could 

not be proven by the facts presented in the ejectment action 

that showed that the Browns were the owners of the disputed 

land. Id. at 217, 355 S.E.2d at 568. We held that the 

ejectment action and the proceeding to establish an implied 

easement "were not part of the same cause of action because 

there was no identity of facts necessary to prove each claim." 

Id.

 In the present case, just as in Haley, the doctrine of 

res judicata is simply not applicable. The facts necessary to 

prove plaintiff's action for actual fraud are different from 

the facts she must prove for her action based upon nonpayment 

of the deed of trust notes. In the present appeal, as in 

Haley, there is "no identity of facts necessary to prove each 

claim." Id.

 We also observe that our holding today is consistent with 

our decision in Smith v. Ware, supra. In Ware, we considered 

whether the doctrine of res judicata barred a claim to recover 

12
dower and damages asserted by a litigant who had 

unsuccessfully filed a motion for judgment for unlawful 

detainer. 244 Va. at 375, 421 S.E.2d at 445. Presley M. 

Smith and Pauline A. Smith were husband and wife. Mr. Smith, 

sole record owner of the real estate where the couple resided, 

died testate and his will and codicil were probated in 

November 1982. The will devised the residence to Mr. Smith's 

sister, Ellen Smith Ware. A codicil contained a provision 

which devised to Mrs. Smith the balance of a debt owed to Mr. 

Smith if any money remained after the estate's expenses were 

paid. The expenses exceeded the balance of the debt, and Mrs. 

Smith received nothing from her husband's estate. Id. at 375-

76, 421 S.E.2d at 445. 

 Ware notified Mrs. Smith that she had to vacate the 

residence. Mrs. Smith left the premises and filed a motion 

for judgment for unlawful detainer. The circuit court ruled 

that the unlawful detainer action was barred by the applicable 

statute of limitations, and the case was dismissed. 

Subsequently, Mrs. Smith filed a bill of complaint against 

Ware seeking commutation of her dower interest in the 

residence and damages for withholding of her dower interest. 

Ware argued that the doctrine of res judicata barred any 

recovery. The circuit court agreed and dismissed the suit. 

Id. at 376, 421 S.E.2d at 445. 

13
 We disagreed with the circuit court's holding that the 

doctrine of res judicata precluded relitigation of the same 

cause of action or any part thereof, which could have been 

litigated between the same parties and their privies. We 

held, among other things, that the doctrine of res judicata

did not bar Mrs. Smith's second suit because the cause of 

action in the second suit differed from the cause of action in 

the first proceeding. We stated: 

 "The causes of action are . . . different. 

Mrs. Smith asserted a right to occupy the property 

in her motion for judgment for unlawful detainer. 

There, she relied upon former Code § 64.1-33 . . . 

which permitted a surviving spouse to reside in the 

marital residence without charge for rent, repairs, 

taxes, or insurance until dower or curtesy was 

assigned. Mrs. Smith, in her bill of complaint, 

seeks a commutation of her dower interest. She pled 

a different cause of action, relying upon former 

Code § 64.1-37 . . . ." 

Id. at 377, 421 S.E.2d at 446. Just like the plaintiff in 

Ware, the plaintiff in this case filed separate causes of 

action and thus the doctrine of res judicata does not bar her 

subsequent cause of action. 

 We recognize that in Flora, Flora & Montague, Inc. v. 

Saunders, supra, we held that the doctrine of res judicata

barred a plaintiff from prosecuting a subsequent cause of 

action for breach of contract. 235 Va. at 311, 367 S.E.2d at 

496. However, our decision in Saunders is clearly 

distinguishable from the present appeal. In 1961, Willis E. 

14
Board owned a tract of land that contained about 200 acres 

located in Franklin County near the waters of the Roanoke 

River. Board and his wife, Annie L. Board, Saunders' 

predecessors in title, executed an option agreement with John 

Hatcher Ferguson and John Hatcher Ferguson, Jr., who were 

Flora, Flora & Montague, Inc.'s (Flora's) predecessors in 

title. Pursuant to the agreement, the Boards granted the 

Fergusons a 10-year option to purchase a portion of the 

Boards' land, containing about 100 acres, subject to certain 

conditions. The Fergusons notified Saunders that they 

intended to exercise the option, but he refused to convey the 

real estate as provided in the option agreement. Id. at 307-

08, 367 S.E.2d at 493-94. 

 In July 1971, the Fergusons filed a suit against Saunders 

for specific performance of the agreement. While the specific 

performance suit was pending, the Fergusons assigned the 

option agreement to Flora and others, who were added as 

complainants. The amended bill of complaint in this suit (the 

first suit) contained a general recitation about the option 

agreement and stated that "[a] copy of [the] Option is 

attached hereto and made a part hereof." Id. at 308-09, 367 

S.E.2d at 494. The circuit court entered an order that Flora 

and the Fergusons were entitled to specific performance of the 

15
contract and the option agreement. Id. at 309, 367 S.E.2d at 

494. 

 In 1984, Flora filed a suit in chancery against Saunders 

and requested that the court enforce certain terms of the 

option agreement that was the basis of the first suit and 

enter a decree that would require Saunders to convey to Flora 

certain land and easements. Saunders filed a plea of res

judicata, and the circuit court, after an ore tenus hearing, 

sustained the plea and dismissed the cause. Id. at 307, 367 

S.E.2d at 493. 

 We held that the circuit court properly sustained the 

plea of res judicata because "Flora could maintain only one 

suit to compel specific performance of the option agreement. 

The agreement's subject matter related solely to the sale of a 

tract of land and necessary appurtenances thereto. Indeed, 

the first suit was instituted to have the court 'grant 

specific performance of [the] Contract,' not a part thereof. 

Moreover, the option agreement was attached to and made a part 

of the bill of complaint." Id. at 311, 367 S.E.2d at 496. We 

held that Flora sought "to make severable an indivisible 

contract. Flora had but one cause of action; thus, Flora's 

claim had to be determined in one suit." Id.

 Unlike the circumstances in Saunders, the present case 

does not involve an attempt by a plaintiff to file two 

16
separate lawsuits based upon the breach of one indivisible 

contract. Rather, as we have already stated, plaintiff's two 

lawsuits involved two separate and distinct causes of action. 

B. 

 Our decision today also is supported by our holding in 

Allstar Towing, Inc. v. City of Alexandria, 231 Va. 421, 344 

S.E.2d 903 (1986). In Allstar, for purposes of res judicata, 

we adopted a definition of the term "cause of action" as "an 

assertion of particular legal rights which have arisen out of 

a definable factual transaction." Id. at 425, 344 S.E.2d at 

906 (quoting Bates v. Devers, 214 Va. 667, 672 n.8, 202 S.E.2d 

917, 921 n.8 (1974)). We concluded in Allstar that the 

doctrine of res judicata did not bar a second action involving 

a challenge to the award of a contract by a municipality. In 

support of our holding, we emphasized that the two actions did 

not involve the same "definable factual transaction," noting 

that "the facts giving rise to the second cause of action were 

not even in existence when the first action was heard and 

decided on the merits." Allstar, 231 Va. at 425, 344 S.E.2d 

at 906. 

 In Allstar, we did not adopt a transactional analysis 

test when we decided whether the claims at issue were barred 

by the doctrine of res judicata. We were not even required to 

consider whether to use such a test because, as we just 

17
stated, the facts that gave rise to the second cause of action 

in Allstar were not in existence when the first cause of 

action arose. Moreover, just one year after this Court 

decided Allstar, we implicitly rejected the transactional 

analysis test in Brown v. Haley, supra, when we stated that 

"[t]he test to determine whether claims are part of a single 

cause of action is whether the same evidence is necessary to 

prove each claim." 233 Va. at 216, 355 S.E.2d at 567. 

Therefore, in accordance with our precedent, we explicitly 

reject the application of the transactional analysis test when 

deciding whether a claim is barred by res judicata. See, 

e.g., Smithfield Foods, 261 Va. at 214, 542 S.E.2d at 769; 

Ware, 244 Va. at 376, 421 S.E.2d at 445; Saunders, 235 Va. at 

310-11, 367 S.E.2d at 495; Haley, 233 Va. at 216, 355 S.E.2d 

at 567. 

 In the present appeal, while the facts supporting both 

the fraud and contract actions arose from defendants' efforts 

to procure financing of the properties, we nevertheless 

conclude that those facts did not arise out of the same 

"definable factual transaction." The alleged 

misrepresentations by defendants constituted a separate 

definable factual transaction. This separate definable 

factual transaction consisted of alleged misrepresentations of 

the values of the properties and future development plans 

18
designed to obscure the actual values of the properties as 

collateral in order to obtain the money later secured by the 

notes. The contract action arose from a distinct and separate 

definable factual transaction limited to breach of the terms 

and conditions appearing on the face of the notes as well as 

the damages related to the failure to satisfy the notes. 

Thus, the contract claim before us is not defeated by the 

doctrine of res judicata on the grounds that it arose from the 

same "definable factual transaction" as the fraud claim. 

Rather, the existence of separate "definable factual 

transactions" supporting the two claims before us requires 

rejection of the doctrine of res judicata. 

 Additionally, for purposes of res judicata, a "cause of 

action" involves an assertion of particular legal rights

arising out of a definable factual transaction. In this case, 

plaintiff's fraud and contract actions arose from different 

definable factual transactions and, just as important, these 

actions constituted assertions of different particular legal 

rights. Clearly, the right to enforce a contract is a 

separate and distinct particular legal right from the right to 

enforce an action for fraud. 

IV. 

 Accordingly, we will reverse the judgment of the circuit 

court and remand this case for a trial on the merits. 

19
Reversed and remanded. 

JUSTICE KINSER, with whom JUSTICE LACY and JUSTICE LEMONS 

join, dissenting. 

 The sole issue in this appeal is whether the breach of 

contract claim is part of the “same cause of action” as the 

fraud claim and thus “could have been litigated” with the 

motion for judgment alleging fraud. Because I conclude that 

both claims assert legal rights that arose out of the same 

“definable factual transaction,” I respectfully dissent and 

would affirm the circuit court’s judgment sustaining the plea 

of res judicata. 

 The majority first holds that the doctrine of res 

judicata does not bar Davis’ breach of contract claim because 

the defendants did not show “identity of the cause of action.” 

The majority next holds that this Court’s decision in Allstar 

Towing v. City of Alexandria, 231 Va. 421, 344 S.E.2d 903 

(1986), supports its conclusion that Davis did not split her 

cause of action because the breach of contract claim did not 

arise out of the same “definable factual transaction” as the 

fraud claim. In reaching these two conclusions, the majority 

cites numerous cases to support the “principle that a 

plaintiff’s assertion of separate and distinct causes of 

action will defeat a defense of res judicata.” The majority 

20
does not, however, consider the impact of Virginia’s 

separation of law and equity upon the application of the res 

judicata bar. In my view, the principles of res judicata 

cannot be properly applied in this case without addressing 

that issue. 

 Res judicata is a judicially-created doctrine premised 

upon public policies favoring certainty in legal relations, an 

end to litigation, and the prevention of harassment of 

parties. Bates v. Devers, 214 Va. 667, 670, 202 S.E.2d 917, 

920 (1974). However, as I will demonstrate, these policies 

cannot be fully realized in Virginia because of certain 

procedural barriers that restrict the application of the 

doctrine of res judicata. Those barriers include the 

separation of law and equity and the absence of a compulsory 

counterclaim rule. Prior to 1977, the inability to join tort 

and contract claims in the same proceeding also limited the 

use of the res judicata bar. When such barriers are not 

implicated in a particular situation, such as the present one, 

our decision in Allstar Towing provides the analytical 

framework for deciding whether the res judicata bar applies. 

I will now review the relevant cases that lead me to these 

conclusions and, in doing so, will explain why I respectfully 

dissent. 

21
“The doctrine [of res judicata] is firmly established in 

our jurisprudence and should be maintained where applicable.” 

Ward v. Charlton, 177 Va. 101, 115, 12 S.E.2d 791, 796 (1941); 

accord Bates, 214 Va. at 670, 202 S.E.2d at 920. This Court 

has explained the effect of the doctrine: 

 When the second suit is between the same parties as the 

first, and on the same cause of action, the judgment in 

the former is conclusive of the latter not only as to 

every question which was decided, but also as to every 

other matter which the parties might have litigated and 

had determined, within the issues as they were made or 

tendered by the pleadings or as incident to or 

essentially connected with the subject matter of the 

litigation, whether the same, as a matter of fact, were 

or were not considered. As to such matters a new suit on 

the same cause of action cannot be maintained between the 

same parties. 

Gimbert v. Norfolk Southern R.R. Co., 152 Va. 684, 689-90, 148 

S.E. 680, 682 (1929), quoted in Allstar Towing, 231 Va. at 

424, 344 S.E.2d at 905. Stated differently, the doctrine 

“bars the relitigation of the same cause of action, or any 

part thereof which could have been litigated, between the same 

parties and their privies.” Bates, 214 Va. at 670-71, 202 

S.E.2d at 920-21. A claim that “ 'could have been 

litigated’ ” is one that, if tried separately, would amount to 

“ ‘claim-splitting.’ ” Id. at 670 n.4, 202 S.E.2d at 920 n.4; 

accord Bill Greever Corp. v. Tazewell Nat’l Bank, 256 Va. 250, 

254, 504 S.E.2d 854, 856 (1998). 

22
 For many years, this Court has held that a party 

asserting the res judicata bar must establish identity of the 

cause of action as well as identity of the remedy sought, 

identity of the parties, and identity of the quality of the 

persons for or against whom the claim is made. See Ferebee v. 

Hungate, 192 Va. 32, 36, 63 S.E.2d 761, 764 (1951); Mowry v. 

City of Virginia Beach, 198 Va. 205, 211, 93 S.E.2d 323, 327 

(1956); Wright v. Castles, 232 Va. 218, 222, 349 S.E.2d 125, 

128 (1986); Smith v. Ware, 244, Va. 374, 376, 421 S.E.2d 444, 

445 (1992). However, it was not until our decisions in Bates 

v. Devers and Allstar Towing that we defined the term “cause 

of action.” 

 In Bates, we explained that the scope of the term “cause 

of action” may vary depending on the context but that, for 

purposes of res judicata, it is the “assertion of particular 

legal rights which have arisen out of a definable factual 

transaction.” 214 Va. at 672 n.8, 202 S.E.2d at 921 n.8. 

Thus, we held in Bates that a claim alleging breach of a 1968 

instrument and claims based on earlier, separate instruments 

were “ ‘distinct divisible claims, depending on separate 

contracts, made at different times and upon different 

principles; and the evidence to support one [was] not 

necessary to support the other, but much of it that would be 

material to sustain the one would be irrelevant to the 

23
other.’ ” Id. at 672, 202 S.E.2d at 922 (quoting Kelly v. 

Board of Public Works, 66 Va. (25 Gratt.) 755, 762-63 (1875)). 

In that holding, we implicitly recognized that the legal 

rights asserted by the plaintiff did not arise out of a single 

“definable factual transaction.” 

The definition of the term “cause of action” enunciated 

in Bates was central to our subsequent decision in Allstar 

Towing. In its first case, Allstar challenged a determination 

by the City of Alexandria that Allstar was a “ ‘nonresponsible’ bidder.” 231 Va. at 425, 344 S.E.2d at 906. In 

a subsequent case filed by Allstar after the City had issued a 

second invitation to bid, Allstar sought relief on the basis 

that the City had awarded the contract to a bidder that 

allegedly did not satisfy certain specifications. Id. 

Because the facts underlying the second cause of action were 

not even in existence when the first case was decided, we 

concluded that “the legal rights asserted in the second action 

arose from a factual transaction that was different from the 

factual transaction giving rise to the assertion of legal 

rights in the first action.” Id.

One year after Allstar Towing, we decided Brown v. Haley, 

233 Va. 210, 355 S.E.2d 563 (1987). There, the plaintiffs, 

Dayton A. and Lucy S. Haley and others, asked the court to, 

among other things, declare that they had an easement to cross 

24
the property of Rufus R. Brown to reach the waters of a lake 

and to enjoin the defendants from impeding access to the lake. 

233 Va. at 214, 355 S.E.2d at 566. However, invoking the 

principles of res judicata, Brown asserted that a prior 

ejectment action at law filed by him and Sallie W. Brown 

against the Haleys barred the second litigation concerning the 

easement. Id.

We disagreed with Brown, finding that the “proof 

necessary to support the [ejectment] action consist[ed] of the 

documents which vest title in the owner and any other evidence 

related to the issue of title[;]” whereas, “[t]he existence of 

an easement is not relevant to the issue of title.” Id. at 

217, 355 S.E.2d at 568. The easement claimed in the second 

action could not have been established by the facts that 

proved ownership of the property in the ejectment action. Id. 

“The two claims . . . were not part of the same cause of 

action because there was no identity of facts necessary to 

prove each claim.” Id.

Nor was there an identity of remedies because the two 

claims could not have been brought in one proceeding. If the 

Haleys had asserted what would have been a counterclaim in the 

ejectment action, the court could not have granted the 

requested relief regarding the easement in that action since 

the relief was equitable in nature and the ejectment action 

25
was at law. Id. at 218, 355 S.E.2d at 568. Therefore, the 

plaintiffs’ recourse was to file the separate suit in equity. 

Id. If we had accepted Brown’s position, the practical effect 

would have been to implement, albeit implicitly, a compulsory 

counterclaim rule. 

The holding in Brown did not mention the definition of 

the term “cause of action” adopted the year before in Allstar 

Towing for good reasons. That definition was not relevant in 

Brown because of our distinction between law and equity and 

its impact upon the application of the res judicata bar. That 

impact is exemplified by our decision in Wright v. Castles, 

decided after Allstar Towing and before Brown. 

The issue in Wright was the effect of a chancery suit for 

injunctive relief upon a subsequent action at law seeking 

compensatory and punitive damages. 232 Va. at 220, 349 S.E.2d 

at 127. In the chancery suit, the plaintiff sought to enjoin 

the defendant from interfering with the plaintiff’s use of a 

certain road. Id. The bill of complaint contained no prayer 

for an award of damages. Id. In the subsequent action at 

law, the plaintiff alleged that the defendant had falsely and 

maliciously slandered his title by interfering with the use of 

the same road, and that the defendant had tortiously 

interfered with the consummation of a contract to sell the 

plaintiff’s land. Id.

26
Although we acknowledged that the same events gave rise 

to both proceedings, id., meaning that both claims arose out 

of a single “definable factual transaction,” we, nevertheless, 

refused to apply the res judicata bar. Declining the 

defendant’s invitation to abrogate Virginia’s distinction 

between law and equity, we pointed out that a party seeking 

monetary damages in a tort case must bring the action on the 

law side of the court. Id. at 222, 349 S.E.2d at 128. 

However, a party asking for injunctive relief must sue in 

equity. Id. Thus, we concluded that “a chancery suit is not 

res judicata to a subsequent law action unless the very matter 

in controversy in the pending action was decided in the prior 

suit.” Id.

 The decision in Wright, rather than that in Allstar 

Towing, also provided the foundation for our refusal to apply 

the res judicata bar in Smith v. Ware. There, the plaintiff 

initially filed a motion for judgment for unlawful detainer, 

seeking not only possession of the residence in which she had 

resided after her husband’s death but also damages. 244 Va. 

at 375, 421 S.E.2d at 445. The trial court ruled that the 

statute of limitations barred the unlawful detainer action. 

Id. at 376, 421 S.E.2d at 445. The plaintiff then filed a 

bill of complaint seeking commutation of her dower interest in 

27
the residence and also damages for withholding that interest. 

Id.

We reversed the trial court’s judgment that res judicata 

barred litigation of the second suit. Id. Citing Wright but 

not Allstar Towing, we held that there was neither an identity 

of remedies nor an identity of causes of action as between the 

motion for judgment for unlawful detainer and the bill of 

complaint for commutation of the plaintiff’s dower interest. 

Id. In the unlawful detainer action, the plaintiff sought 

possession of the property based on the provisions of former 

Code § 64.1-33; whereas, in the chancery suit, she asked for a 

commutation of her dower interest, relying upon former Code 

§ 64.1-37. Id. at 377, 421 S.E.2d at 446. 

 In contrast, the decision in Allstar Towing had a bearing 

on our application of the res judicata bar in Flora, Flora & 

Montague, Inc. v. Saunders, 235 Va. 306, 367 S.E.2d 493 

(1988), because the law-equity distinction was not a factor. 

There, a vendee first sought specific performance of an option 

agreement to purchase real estate and asked the court to 

convey the property at issue. Id. at 309, 367 S.E.2d at 494. 

The second suit, also filed in chancery, involved the vendee’s 

claim that, among other things, it was entitled to use certain 

rights-of-way, pursuant to the option agreement, over the 

28
residual land owned by the vendor. Id. at 310, 367 S.E.2d at 

495. 

 We held that the second suit was barred by the doctrine 

of res judicata. Id. The vendee had but one cause of action 

to compel specific performance of the option agreement because 

the agreement’s subject matter concerned the sale of the land 

and the necessary appurtenances thereto. Id. at 311-12, 367 

S.E.2d at 496. In other words, there was a single “definable 

factual transaction” out of which both claims arose. 

 We did not apply the doctrine of res judicata in Brown, 

Wright, and Smith because the respective plaintiff in each of 

those cases sought a remedy that was not available in a prior 

proceeding due to the separation of law and equity. These 

cases unquestionably demonstrate that the distinction between 

law and equity limits the application of the res judicata bar 

in Virginia. Indeed, that distinction was the essence of the 

Wright decision. However, the separation of law and equity 

did not play a role in Bates or Flora, nor is it a factor in 

the case before us. Like the plaintiffs in Bates and Flora, 

Davis sought relief on the same side of the court in both of 

her cases. 

A jurisdiction’s separation of law from equity is 

recognized in the Restatement of Judgments (Second) § 26(1)(c) 

(1982), as an exception to the general rule concerning claim29
splitting. The rule that “a valid and final judgment rendered 

in an action extinguishes the plaintiff’s claim . . . , 

includ[ing] all rights of the plaintiff to remedies against 

the defendant with respect to all or any part of the 

transaction . . . out of which the action arose,” id. at § 24, 

does not apply when: 

 [t]he plaintiff was unable to rely on a certain theory of 

the case or to seek a certain remedy or form of relief in 

the first action because of the limitations on the 

subject matter jurisdiction of the courts or restrictions 

on their authority to entertain multiple theories or 

demands for multiple remedies or forms of relief in a 

single action, and the plaintiff desires in the second 

action to rely on that theory or to seek that remedy or 

form of relief[.] 

Id. at § 26(c). Instead, the rule against claim-splitting is 

predicated on the assumption that the jurisdiction 

in which the first judgment was rendered was one 

which put no formal barriers in the way of a 

litigant’s presenting to a court in one action the 

entire claim including any theories of recovery or 

demands for relief that might have been available to 

him under applicable law. 

Id. at § 26(1)(c) cmt. c. One of the formal barriers 

referenced in the Restatement is the separation of law and 

equity. Id.; see also id. at § 25 cmt. i. 

 That such formal barriers affect the rule against claimsplitting is not a new concept in Virginia. In Bates, where 

we first defined the term “cause of action” for res judicata 

purposes, this Court acknowledged that procedural barriers can 

restrict the application of res judicata principles. There, 

30
we cited the Restatement of Judgments §§ 47, 62, 83 (1942), in 

our discussion of a claim that “could have been litigated.” 

214 Va. at 671, 202 S.E.2d at 921. Comment c to § 62 provided 

that “[a]s a result of one tortious act or breach of contract 

there may be a number of invasions of a single interest or of 

different interests.” Restatement of Judgments § 62 cmt. c 

(1942). To decide whether there is a single cause of action 

arising from the tortious act or breach of contract, the first 

question, being one of procedure, was whether a plaintiff “can 

recover in one action for all of the harms or breaches of 

contract[.]” Id. “[I]f because of procedural rules separate 

actions must be brought,” a judgment for one invasion would 

not prevent an action for others wrongs. Id.

 However, if all claims could have been brought in one 

proceeding, the next question concerned the effect of a 

judgment for one invasion or breach on other claims not 

included in that action. Id. “This [was] a question of 

substantive law. The answer depend[ed] upon whether the 

events or series of events [were] regarded as constituting one 

inseparable cause of action at the time of the judgment.” Id.

 In addition to the separation of law and equity, another 

procedural barrier affected the application of the res 

judicata bar in the past when tort and contract claims could 

not be joined in the same proceeding in Virginia. See, e.g., 

31
Standard Products Co. v. Wooldridge & Co., Ltd., 214 Va. 476, 

481, 201 S.E.2d 801, 805 (1974); Kavanaugh v. Donovan, 186 Va. 

85, 93, 41 S.E.2d 489, 493 (1947). However, in 1977, the 

General Assembly eliminated that barrier with the enactment of 

§ 8.01-272. In pertinent part, that statute provides that 

“[a] party may join a claim in tort with one in contract 

provided that all claims so joined arise out of the same 

transaction or occurrence.” In Code § 8.01-281, the General 

Assembly also authorized the pleading of alternative facts and 

theories of recovery “provided that such claims, defenses, or 

demands for relief so joined arise out of the same transaction 

or occurrence.” 

 As we stated in Fox v. Deese, 234 Va. 412, 423, 362 

S.E.2d 699, 705 (1987), those statutes “represented a radical 

departure from the common-law pleading rule[.]” Similarly, 

our implementation in Allstar Towing of the concept that a 

cause of action, for purposes of res judicata, must be viewed 

in terms of a “definable factual transaction” was a shift in 

our res judicata jurisprudence to the approach employed by a 

majority of jurisdictions: 

 The present trend is to see [a] claim in factual 

terms and to make it coterminous with the transaction 

regardless of the number of substantive theories, or 

variant forms of relief flowing from those theories, that 

may be available to the plaintiff; regardless of the 

number of primary rights that may have been invaded; and 

regardless of the variations in the evidence needed to 

32
support the theories or rights. The transaction is the 

basis of the litigative unit or entity which may not be 

split. 

Restatement of Judgments (Second) § 24(1) cmt. a. See also, 

Williamson v. Columbia Gas & Electric Corp., 186 F.2d 464, 

469-70 (3rd Cir. 1950); Ramseyer v. Ramseyer, 569 P.2d 358, 

360 (Idaho 1977); Kent County Bd. of Educ. v. Bilbrough, 525 

A.2d 232, 236 (Md. 1987); Eastern Marine Constr. Corp. v. 

First Southern Leasing, Ltd., 525 A.2d 709, 712 (N.H. 1987). 

 Our shift was consistent with the General Assembly’s 

transactional approach employed in Code §§ 8.01-272 and –281, 

as evidenced by its use of the language “same transaction or 

occurrence.” Both concepts, “definable factual transaction” 

and “same transaction or occurrence,” advance public policies 

embracing judicial economy, ending litigation, providing 

certainty in legal relationships, and preventing party 

harassment. However, a transactional approach must “strike a 

delicate balance between, on one hand, the interests of the 

defendant and the courts in bringing litigation to a close 

and, on the other hand, the interests of the plaintiff in the 

vindication of a just claim.” Restatement of Judgments 

(Second) § 24 cmt. b. 

 The transactional analysis utilized in Allstar Towing is 

limited by the distinction between law and equity. In 

determining whether the principles of res judicata bar a 

33
particular proceeding, the Allstar Towing definition of the 

term “cause of action” becomes relevant only when the lawequity distinction is not in play. In other words, legal 

rights asserted in two separate cases could arise out of a 

single “identifiable factual transaction,” as they clearly did 

in Wright, but the second proceeding would not be barred if 

the relief sought therein was not available in the prior 

proceeding due to the separation of law and equity. See

Wright, 232 Va. at 222, 349 S.E.2d at 128. I believe that is 

the reason Allstar Towing was not mentioned in the Brown, 

Wright, and Smith decisions. 

 The majority, however, states that this Court did not 

adopt a transactional approach in Allstar Towing. I disagree. 

The definition of the term “cause of action,” first introduced 

in Bates and then explicitly relied upon in Allstar Towing and 

Waterfront Marine Constr., Inc. v. North End 49ers Sandbridge 

Bulkhead Groups, A, B and C, 251 Va. 417, 434, 468 S.E.2d 894, 

904 (1996), employs the phrase “definable factual 

transaction.” I find no analytical difference between that 

phrase and the phrase “same transaction or occurrence,” which 

is the language used by the General Assembly in Code §§ 8.01-

272 and –281 and characterized by this Court as “so plain and 

unambiguous that it requires no interpretation.” Powers v. 

Cherin, 249 Va. 33, 37, 452 S.E.2d 666, 669 (1995). If use of 

34
the language “definable factual transaction” in the definition 

of the term “cause of action” was not indicative of this 

Court’s decision to use a transactional analysis when deciding 

whether to apply the res judicata bar, then what was the 

intent of the Court? 

In truth, the effect of the majority’s explicit rejection 

of a transactional approach is to overrule our decision in 

Allstar Towing. However, the majority does not explain why 

this precedent should be cast aside. Despite rejecting a 

transactional approach and overruling Allstar Towing, the 

majority, nevertheless, utilizes the Allstar Towing definition 

of the term “cause of action,” and the majority states that 

its decision is supported by the holding in that case. 

 I find no reason to overrule the precedent established in 

Allstar Towing. Thus, I conclude that the dispositive inquiry 

in this case, since the separation of law and equity is not a 

factor, is whether Davis’ claim alleging breach of contract 

and the former claim alleging fraud arose out of a single 

“definable factual transaction.” In my opinion, they did. 

The “definable factual transaction” was the events 

surrounding Anita Lee Davis’ loans to Marshall Homes, Inc. and 

others for the purpose of purchasing certain parcels of real 

estate. In the present motion for judgment, Davis alleged 

breach of contract for failure to pay four deed of trust 

35
notes. Those notes, signed by Marshall Homes, evidenced the 

loans made by Davis to purchase four parcels of real estate 

that previously had been deeded to her in lieu of foreclosure 

and were executed in conjunction with Davis’ loans to purchase 

those properties. 

Although the majority asserts that Marshall’s alleged 

misrepresentations constituted one “definable factual 

transaction” and the terms and conditions of the notes arose 

from a separate “definable factual transaction,” those notes 

did not come into existence at some later point in time or as 

a result of different negotiations between the parties. Even 

the majority acknowledges that “the facts supporting both the 

fraud and contract actions arose from defendants’ efforts to 

procure financing of the properties[.]” 

 The majority also calls Davis’ claims different legal 

rights and emphasizes that the elements of a claim for fraud 

are different from the elements of a claim for breach of 

contract. However, the determination whether a particular 

claim “could have been litigated” in a prior action and is, 

thus, barred by the doctrine of res judicata does not depend 

on whether the elements of the prior claim and the present 

claim are identical. In Jones v. Morris Plan Bank of 

Portsmouth, 168 Va. 284, 191 S.E. 608 (1937), this Court 

stated: 

36
 If suit is brought for a part of a claim, a judgment 

obtained in that action precludes the plaintiff from 

bringing a second action for the residue of the claim, 

notwithstanding [that] the second form of action is not 

identical with the first, or different grounds for relief 

are set forth in the second suit. 

Id. at 291, 191 S.E. at 610 (emphasis added); accord Saunders, 

235 Va. at 311, 367 S.E.2d at 495; Snyder v. Exum, 227 Va. 

373, 377, 315 S.E.2d 216, 218 (1984); see also Restatement of 

Judgments (Second) § 25 and § 24 cmt. c.1

 If the application of res judicata turned on whether the 

elements of the legal rights asserted were the same in both 

cases, the doctrine would bar only those legal rights based on 

the same legal theory and asserting the same grounds for 

relief. A claim that “could have been litigated” would 

seldom, if ever, be barred. For example, under the majority’s 

holding today, a plaintiff could assert claims alleging 

intentional interference with contract and business 

expectancies, and conspiracy to injure another in trade or 

business in separate proceedings without fear of the second 

 1

 The Restatement of Judgments (Second) § 24 cmt. c. 

states: 

That a number of different legal theories casting 

liability on an actor may apply to a given episode does 

not create multiple transactions and hence multiple 

claims. This remains true although the several legal 

theories depend on different shadings of the facts, or 

would emphasize different elements of the facts, or would 

call for different measures of liability or different 

kinds of relief. 

37
proceeding being barred by the principles of res judicata even 

though the same events gave rise to both claims. 

 Davis’ “second form of action” as well as the “grounds 

for relief” were obviously not identical with the form of 

action and grounds of relief set forth in the first case. 

Jones, 168 Va. at 291, 191 S.E. at 610. The second case 

alleged breach of contract while the first alleged fraud. 

Those differences, however, do not change the fact that the 

legal rights asserted by Davis arose out of a single 

“definable factual transaction.” Allstar Towing, 231 Va. at 

425, 344 S.E.2d at 906. 

 My conclusion is consistent with this Court’s decision in 

Waterfront Marine Constr., Inc. v. North End 49ers Sandbridge 

Bulkhead Groups A, B and C. Applying the Allstar Towing

definition of the term “cause of action,” we held that a 

second arbitration demand was barred by a prior arbitration 

award under the principles of res judicata. 251 Va. at 435, 

468 S.E.2d at 905. In the first arbitration proceeding, the 

landowners asserted a breach of contract based on alleged 

design and construction defects in a bulkhead. Id. at 434, 

468 S.E.2d at 904. The landowners argued that the second 

arbitration demand claiming breach of warranty was not 

identical to the first because the bulkhead had not failed at 

the time of the first demand. Id. We disagreed and 

38
specifically stated that “[l]abeling the claim a breach of 

warranty rather than a breach of contract [did] not alter the 

nature of the claim.” Id. at 435, 468 S.E.2d at 904. 

Similarly, different labeling does not alter the fact that 

both of Davis’ claims arose out of a “definable factual 

transaction.” 

 By analyzing identity of the cause of action in terms of 

the elements of the legal rights asserted and addressing that 

issue apart from the Allstar Towing definition of the term 

“cause of action,” the majority is also able to say that the 

facts necessary to prove Davis’ claim for fraud were different 

from the facts required to establish her breach of contract 

claim. In Brown, we stated that “[t]he test to determine 

whether claims are part of a single cause of action is whether 

the same evidence is necessary to prove each claim.” 233 Va. 

at 216, 35 S.E.2d at 567. 

However, unlike the majority, I do not believe that the 

“same evidence test” should be construed in terms of the 

elements of the legal rights asserted, nor should it be 

applied so narrowly as to require each piece of evidence to be 

exactly the same in both cases. See Restatement of Judgments 

(Second) § 25 cmt. b. Otherwise, as I have already stated, a 

claim that “could have been litigated” in a prior proceeding 

would never be barred. The doctrine of res judicata would 

39
apply only when an unsuccessful plaintiff re-files the 

identical claim based on the same legal theory. 

 Thus, I conclude that the focus must be on the evidence 

that is “necessary” to successfully prove both claims. Here, 

in order to prevail on her fraud claim, Davis had to establish 

the existence of the loans, the nonpayment of the notes 

evidencing those loans, and the amounts due and owing. 

Although that evidence, without more, would not have 

established fraud, it did prove the breach of contract. In 

proving fraud, Davis at the same time proved breach of 

contract. Under the particular facts of this case, the fraud 

claim subsumed the breach of contract claim. For that reason, 

I conclude that the same evidence was necessary to prove both 

claims. 

 Finally, I would be remiss if I failed to discuss the 

impact of my analysis and conclusions on this Court’s decision 

in Carter v. Hinkle, 189 Va. 1, 52 S.E.2d 135 (1949). The 

issue presented there was whether a person who had sustained 

both property damage and personal injury as the result of a 

single negligent act of a defendant could maintain two 

separate actions for the injuries or was a judgment obtained 

in an action for the property damage a bar to a subsequent 

action to recover for the personal injury. Id. at 3, 52 

S.E.2d at 136. Aligning ourselves with the minority view, 

40
this Court held that the common law rule allowing two actions 

in this situation still applied because the General Assembly 

had not changed or altered the common law in that respect. 

Id. at 12, 52 S.E.2d at 140. 

 I acknowledge that the separation of law and equity 

played no role in that decision. However, I conclude that the 

rationale for the holding in Carter remains sound in the 

particular situation presented there. In 1977, the General 

Assembly abrogated the common law with regard to pleading tort 

and contract claims in the same proceeding by enacting Code 

§§ 8.01-272 and –281. But, it did not alter the particular 

common law rule discussed in Carter even though the enactment 

of those statutes promotes judicial economy and an end to 

litigation while the common law rule in Carter does not. 

 Similarly, the General Assembly enacted Code § 8.01-6.1 

in 1996. That statute states that an amendment of a pleading 

changing or adding a claim or defense relates back to the 

original pleading for purposes of the statute of limitations 

if, among other things, “the claim or defense asserted in the 

amended pleading arose of the conduct, transaction or 

occurrence set forth in the original pleading.” The statute 

altered the limited definition of the term “cause of action” 

41
employed by this Court in Vines v. Branch, 244 Va. 185, 418 

S.E.2d 890 (1992).2

 As with the enactment of Code §§ 8.01-272 and –281, the 

passage of Code § 8.01-6.1 reflected the General Assembly’s 

shift to a transactional approach, but again the General 

Assembly left intact the common law rule followed in Carter. 

See Weathers v. Commonwealth, 262 Va. 803, 805, 553 S.E.2d 

729, 730 (2001) (General Assembly, when acting in an area, is 

presumed to know the applicable law as stated by an appellate 

court). And, I believe that it did so for good reasons. 

After an automobile accident causing injury to person and 

property, “[q]uestions involving the rights of automobile 

insurance carriers, both liability and collision, rights of 

assignees, receivers, trustees in bankruptcy, and subrogees, 

render it essential in certain cases to allow one action for 

 2

 In Vines, we concluded that an amendment alleging breach 

of contract to a plaintiff’s original motion for judgment in 

tort for the recovery of property stated a new cause of cause, 

and was thus barred by the applicable statute of limitations, 

because different elements needed to be proved and a different 

measure of recovery would apply. 244 Va. at 189, 418 S.E.2d 

at 893. Notably, both the original motion for judgment and 

the amendment arose out of the same transaction, specifically 

the events surrounding the plaintiff’s purchase of an 

automobile and the defendant’s placing the title of the 

vehicle in her name and retaining possession of it. 

The majority’s analysis regarding identity of the cause 

of action is not consistent with the General Assembly’s 

enactment of Code § 8.01-6.1 in response to the decision in 

Vines. 

42
personal injury and another for property damage.” Carter, 189 

Va. at 12, 52 S.E.2d at 140. 

 For these reasons, I conclude that the doctrine of res 

judicata bars litigation of the present case alleging breach 

of contract. Therefore, I respectfully dissent and would 

affirm the judgment of the circuit court. 

JUSTICE LEMONS, dissenting. 

I join Justice Kinser’s dissent in every respect and 

write separately only to emphasize the potential consequences 

of the majority opinion. 

In essence, the majority pretends that the Court never 

decided Bates or Allstar Towing and ignores the special 

definition of “cause of action” adopted for the express 

purpose of res judicata analysis. In Bates, 214 Va. at 672 

n.8, 202 S.E.2d at 921 n.8, we clearly stated that “[a] ‘cause 

of action’, for purposes of res judicata, may be broadly 

characterized as an assertion of particular legal rights which 

have arisen out of a definable factual transaction.” 

In Allstar Towing, we quoted the passage above from 

Bates, and in determining that res judicata did not bar the 

successive action, we stated the following: “In sum, the legal 

rights asserted in the second action arose from a factual 

transaction that was different from the factual transaction 

43
giving rise to the assertion of legal rights in the first 

action.” Allstar Towing, 231 Va. at 425, 344 S.E.2d at 906. 

It is unmistakable that the Court embraced a 

transactional analysis for the purpose of res judicata. In 

doing so Virginia joined the majority of states. Today, 

without acknowledging its reversal, the majority ignores the 

special definition of “cause of action” for res judicata

purposes and reverts to the national minority on this issue of 

great importance to individuals and businesses alike. 

It is commonplace for a single transactional event to 

provide the foundation for multiple lawsuits. See, e.g., 

Simmons v. Miller, 261 Va. 561, 544 S.E.2d 666 (2001); 

Feddeman & Co. v. Langan Assocs., 260 Va. 35, 530 S.E.2d 668 

(2000). In the hypothetical case of a business dispute that 

spawns multiple theories of recovery, the majority opinion 

would permit separate and successive lawsuits between the same 

parties on theories of breach of contract, breach of fiduciary 

duty, common law conspiracy, statutory conspiracy, common law 

fraud, constructive fraud, and conversion. Under the majority 

opinion, unless all of the elements are identical, res

judicata would not prohibit successive suits between the same 

parties. Of course, the reason there are separate legal 

theories is precisely because there are differences in the 

elements of the causes of action. While the extent of 

44
potential harassment of litigants and misuse of judicial 

resources may be affected by the application of collateral 

estoppel to narrow the matters subject to proof, and the 

expiration of the statute of limitations may preclude a 

particular cause of action, the reality of successive suits, 

even in different venues, remains a potential consequence of 

the majority opinion. 

As these causes of action have proliferated in American 

law, a restraining concept designed to promote judicial 

efficiency and avoid harassment of litigants developed. That 

concept was the transactional analysis approach to the 

application of the doctrine of res judicata. While a litigant 

could pursue multiple theories of recovery, the transactional 

approach would permit such multiplicity, but only if the 

courts and litigants were required to meet such challenges in 

one proceeding. With a transactional analysis, the correct 

balance is achieved between access to the courts for 

remediation of wrongs and freedom from successive harassment, 

while husbanding judicial resources. Perhaps that is why the 

majority of jurisdictions have taken such an approach. 

Perhaps that is why Virginia did as well in Bates and Allstar 

Towing. Perhaps that is why the General Assembly adopted a 

transactional analysis as a predicate for Code §§ 8.01-272 and 

–281. Perhaps that is why it is so perplexing to witness this 

45
inexplicable retreat in the face of such overwhelming 

justification for transactional analysis in the application of 

res judicata. 

I dissent. 

46