### IN THE COURT OF APP EALS OF TENNESS EE AT JAC KSON Su bm itt ed on B ri ef

s Ja nuary 14, 200 9
WESLE Y R OBER TS

v . WILLIAM D. VA UGH N

An Appeal from the Circuit Court for Madison County No . C-07-64 Donald H . Allen, Jud ge

No. W2008-01126-COA- R3-CV - Filed June 10, 2009

This appea l involves the doctrine of re s ju dic ata

. The plaintiff and the d ef en d an t h ad sever al business dealings, i ncluding loans, a marketing consultant agre ement, and a lea se agr eeme nt. The plaint if f f ile d a la ws uit a ga ins t the de fe nd a nt in ge ne ra l ses sio ns c ou rt to r e c ov e r m on ie s a lle ge dly owed unde r the mar

keting consultant agre ement. The defe ndant fa iled to answer o r ap p ea r. The gener al sessions c ourt enter ed a default judgment in fa vor of the plaintiff. The plaintiff the n filed theins ta nt l a ws uit

a ga inst th e sam e de fe nd a nt i n c ir c uit c ou rt

. In the c ircuit court law suit, the plaintiff sought to r ecove r monies that the defe ndant allege dly owed fr om all of the parties’ financ ial dealings, i ncluding the m arke ting consultant agre ement that was the subject of the previous genera l sessions judgment. The trial court grante d summary judgment in favor of the def endant ba sed on
re s ju dic ata . The plaintiff now appea ls. We a ffirm a s to the claims in circuit court bas ed on the marke ting consultant agree ment. As to the remaining c laims, w e reve rse, finding that the def endant failed to e stablish that they are part of the cause of action that was a djudicated in the ge nera l sessions
c ou rt

. Te nn. R . A pp. P . 3 App e al a s o f R igh t; Judg me nt of th e Ci r c uit

Co ur t i s Affir med in Part, Re verse d in Part, and Rem anded

H OL LY M. K I RBY , J., delivere d the opinion of the Court, in which A LA N E. H I G H ERS , P.J., W.S., and J. S TE VE N S TA FF O RD , J., joined.
MarleneSimps on, Jackson, Te nnessee , for the Plaintiff/Appe llant, Wesley Roberts. William D. Vaughn, Columbus, Georgia , Def endant/Appe llee, pr

o s e
.B e c a u se this a p p e a l ar ise s o u t o f a g ra n t o f sum m a ry j u d g m e n t, w e a ssu m e the tru th o f t h e no n -m o v a n t’s 1 fac tua l alle g a tio n s. See Fo s t er Bu s . P ark, L L C v. Wi nfr ee , N o. M 20 06

- 02 34 0- C O A

- R 3- C V , 200 9 W L 11 32 42 , at
* 2 2 (T enn. C t

. A p p

. Jan. 15 , 20 0 9 ).

In August 20 0 4 , R o b ert s l o aned V aughn $ 2 5 , 0 0 0 , and be t ween D ecem b er 20 0 5 and Jul y 20 0 6 , V aughn 2 b o rr o w e d a n a d d iti o n a l $ 3 1 ,5 0 0 fro m R o b e rts.

T h e M a r k e t i n g Con s u l t a n t Ag r e e me n t w a s be t w e e n W

. Rob e r t s & Comp a n y a n d Th e Vau g h n L a w F i r m, 3 si gn ed b y R o b erts and V au gh n, resp ec t i ve l y, as rep rese ntati ve s o f t ho se c o m p an i es.

R o b e rts a lleg e s tha t he a n d V a u g h n e n te re d into a n o ra l l e a se a g re e m e n t f o r a thr e e -yea r le a se . R o b e rts 4

ass ert s t hat V aughn p ai d t hree mo nt hs’ rent and oc cup i ed t he rent al prem i ses f o r one year

. -2- OP IN ION

F ACT S AND P R OC EDU R A L H I S T ORY
Th is a pp e a l ari se s o ut o f the bu sin e ss de a lin gs be tw e e n Pla int if f/Ap pe llant W e sle y Ro be rt s (“Roberts”) and Def

endant/Appe llee attorney William V aughn (“V aughn”)

. During the cour se of 1 thepa rt ie s’ bu sin e ss r e lati on sh ip , the y e nte re d in to s e ve ra l f inanc ia l arr a ng e me nts . Fr om A ug us t 2004 to July 2006, Roberts gave Vaughn se vera l personal loans. On September 1, 2004, the parties 2 enter ed into a written Marke ting Consultant Agre ement, under which Roberts was t o p ro vide marke ting services in exchange for twenty-five perc ent of the pr ofits of Vaughn’ s law firm. Severa l 3
mon ths late r, in D e c e mbe r 2 00 4, Rob e rt s e nte re d in to an a gr e e me nt t o le a se re a l p rop erty to Vaug hn

. Rob e rt s a lso pu rc ha se d v ari ou s su pp lie s f or Vaug hn ’s la w f

irm. 4

In De cembe r 2006, Roberts filed a lawsuit against Vaughn in the Madison County Genera l Sessions Court t o rec over monies that Va ughn allegedly owe d him under the Mar keting Consultant Agre ement. Vaughn failed to a nswer the complaint or appe ar at the hearing.
Roberts’ compensation unde r the Agre ement was a perc entage of the profits of Vaughn’s law firm. Because Roberts did not have inf orm ation on the law f

irm’s profits, the Ge nera l Sessions Cour t est imate d th e a mou nt that V aug hn ow e d Ro be rt s u nd e r the Ag re e me nt. Ba se d o n th is
e sti mate , inJa nu ary 20 07 , th e Ge ne ra l Se ssi on s Court ent e re d a def ault jud gme nt i n f

a vo r o f R ob e rt s in the a mou nt o f $ 10 ,6 30 . T he rewa s n o a pp e a l f ro m th e Ge ne ra l Se ssi on s Co urt ju dg me nt.
Th re e mon ths late r, on Ma rc h 6 , 20 07 , Rob e rt s f

ile d th e ins ta nt l a ws uit

a ga ins t V aug hn in theMa dis on Cou nty Cir c uit Cou rt

. In this lawsuit, Roberts s o u g h t t o collect f rom Vaughn the monies owed Roberts for the pe rsonal loans made to V aughn from August 2004 to July 2006, the rent due under th e De ce mber 2004 ora l lease a gree ment, the proc eeds of a re fund che ck for advertising t hat Vaughn r ece ived in May 2006, the cost of the supplies that Roberts purcha sed for Vaughn’ s law firm, a nd the cor rec t amount of monies owed by Va ughn under the Marke ting Con su ltant A gr e e me nt. Vaughn’ s answe r t o Roberts’ complaint allege d, int e r a lia , that the doctrine of re s ju dic ata barr ed the e ntire Circuit Court action, base d on the judgment in the Gene ral Sessions Cou rt

.-3-

On J a n u ar y 1 5 , 2 0 0 8 , V au g h n f il e d a mo ti o n f o r s u mm ar y ju d g me n t, ar g u in g th a t the previous Ge nera l Sessions j udgment barr ed Roberts from pursuing this lawsuit, under the doc trine of re s ju dic ata

. In the mot ion , Vaug hn arg ue d that Ro be rt s’ Cir c uit Cou rt la ws uit pr e se nte d c la ims that wer e betwe en the sa me parties and involved the same set of fac ts and circ umstances that we re a t i s s u e i n t h e G e n e r a l S e s sio n la ws uit

. In support, Vaughn pointed to the Marke ting Consul tant Ag re e me nt, wh ic h w a s at is su e in the Ge ne ra l Se ssi on s la ws uit a nd wa s a tta c he d to Rob e rt s’ Cir c uit Cou rt c omp la int

. In support of his motion for summary judgment, Vaughn f iled his own aff

idavit, asserting that the parties in both the Gene ral Sessions lawsuit and the Circuit Court lawsuit wer e the sa me, and that a fina l judgment was rende red in the G ener al Sessions lawsuit and was not appe aled. He state d that the Gene ral Sessions lawsuit “re garde d the same f acts a nd bu s i n es s re l ati onship betwee n the pa rt ie s in[the Cir c uit

Cou rt la ws uit ] w hic h is theiss ue o f th e [Ma rk e tin g Co ns ult a nt A gr e e me nt] listed as Exhibit E attache d to the [Ci rcuit C ourt] complaint as i t was also attache d to the Gene ral Se ssi on [s ]” c omp la int

. In re sponse, Roberts conc eded that the parties in both lawsuits wer e the sa m e an d t hat the Ge ne ra l Se ssi on s Co urt w a s a c ou rt of c omp e te nt j urisd ict ion . H e c on te nd e d, ho we ve r, that res jud ic ata was not applica

ble bec ause the cause of ac tion was not the s ame. He claimed t hat he had “not bee n given the opportunity to discover” the amount due him under the Mar keting Consultant Agre ement. The other c laims, h e co n t ended, did not arise from the Ma rketing Consultant Agre ement. Roberts a lso argued that the General Sessions judgment was not a fina l judgment on the merits bec ause V aughn did not appea r and a default judgment was taken.
Rob e rt s f ile d his o wna ff

ida vit in o pp os iti on to V aug hn ’s mot ionfo r s umm ary jud gme nt. In t he affidavit, R oberts outl ined t he parties’ busi ness dealings and contracts that wer e the subjec t of the Circuit Court law suit. Roberts said that he loaned mone y to Vaughn in August 2004 and fr om Dec ember

2005 until Jul y 2006. In Dec ember 2004, they enter ed into a lea se agr eeme nt, understood to l as t for thre e yea

rs. In Septembe r 2004, the pa rties enter ed into the Marke ting Consul tant Agre ement, base d on a per centa ge of the profits from Vaughn’s law pr actice . During the c ourse of thei r business relationship, Roberts also purc hased of fice items and supplies for Vaughn. He
c on te nd e d th a t V aug hn ow e d h im s ub stanti a l mo nie s f ro m a ll o f the se de a lin gs
. After considering the motion and the r ecor d as a w ho l e, t h e t ri al court issued an orde r on April 29, 200 8 , finding that Vaughn ha d sufficie ntly established that the doctrine of re s ju dic ata pr e c lud e d Ro be rt s f

ro m a sse rt ing thec la ims c on ta ine d inhis c omp la int

. The trial c ourt found that the def ault j u dgment enter ed against Vaughn in the Madison County Gener al Sessions Court was
a jud gme nt o n th e me ri ts andthat the c la ims in the Cir c uit Cou rt la ws uit we ree ith e r the sa me c la ims
asserted in the Gene ral Sessions lawsuit or wer e claims t h at could have and should have been
asserted in the Gene ral Sessions lawsuit. The trial court noted that Roberts could have appea led the Genera l S es s i o n s C o u rt ’s j u d g m en tan d ad d ed t h e a d d i t i o n al cl ai m s o n ap p ea l

. Ac co rd i n g l y , t h e t ri al
c ou rt gran ted s umm ary jud gme nt i n f a vo r o f V aug hn . O n M a y 2 9, 20 08 , Ro be rt s f ile d a tim e ly
no tic e of app e a l.

I S S UE S ON A PP E AL AND S TANDA RD OF R EVIEW-4-

On appe al, Roberts ar gues that the trial court erre d in holding that the doctrine of re s ju dic ata ba rr e d h is C ir c uit

Cou rt la ws uit . H e c on te nd s th a t th e tria l c ou rt e rr e d infi nd ing that th e default judgment in the Madison County Genera l Sessions Court was a final judgment on the merits, and in f inding that the c laims and fac ts in the Circuit Court l awsuit arose from the sa me cause of a ction
a dju dic a te d intheMa dis on Cou nty Ge ne ra l Se ssi on s Co urt. Since only questions of law a re involved, the re is no presumption of corr ectne ss rega rding the trial court’s grant of summary judgment. Se e Bain v . W e lls , 936 S.W.2d 618, 622 (Tenn. 1997) (c itatio n omi tte d)

. Th e re fo re , o ur re vie w i s de novo on the re cord be fore this Court. See Warren
v . Es tate of

Kir k , 9 54 S.W .2 d 722 , 7 23 (T e nn . 1 99 7) (c itatio n o mitte d) . Su mma ry jud gme nt i s appropriate “if

the pleadings, de positions, answers t o in ter r o g ato rie s , an d

a d mi s s io n s on file, together with the aff

idavits, if any, show t h at t h er e i s no genuine issue a s to any materia l fac t and that the moving party is entitled to a judgment as a matter of law.” Tenn. R. Civ. P. 56.04. The moving party ha s the burden of persua ding the court that there are no genuine issues of m aterial fac t and that the moving party is enti tled to a judgment as a matter of law

. Hann an v. Allt el Publ’g Co. , 270 S.W.3d 1, 5 (Tenn. 2008) (citing By rd v . Ha ll , 8 47 S.W .2 d 2 08 , 21 5 ( Te nn . 1 99 3) ). “ To me e t it s burden of production and shift th e b u rd en to the nonmoving party, the moving party must either aff irmatively negate an e ssential element of the nonmoving party’s c laim or establish an af firmative defe nse.” Id. (citing By rd , 847 S.W.2d at 215 n.5). If the moving party fails to ca rry its burden, the n the motion for summary judgment should be dismissed. Id. (citing By rd , 847 S.W.2d at 215).
In this case , summary judgment was granted to Vaughn on t h e b asi s of re s ju dic ata , an aff irmative def

ense. A s such, Vaughn ha s the burden of establishing fac ts to support eac h element of the def ense. See NationsBan k of Tenn. v. JDRC Corp. , No. 03A01-9607- CH-00226, 1997 WL 290188, at *2 (c iting By rd , 8 47 S.W .2 d at 21 5 n .5). Th e bu rd e n th e n s hif ts t o Ro be rt s to demonstrate the existenceof a ge nuine issue of mate rial fa ct. Hann an , 270 S.W.3d at 5 (c i ting By rd , 847 S.W.2d at 215 ).
A N A L Y SIS
T h e d o c trin e of res ju di cata se rv e s to ba r “ a se c on d s uit

be tw e e n th e sa me pa

rt ie s o r the ir privies on the same cause of ac tion with respect to all issues which wer e or could have been litigated inth e former suit.” Ric har ds on v . T e nn. B d. of

De ntis try , 913 S.W.2d 446, 459 (Tenn. 1995) (c itatio n o mitte d) . T he pu rp os e of thi s d oc trineis t o “ pr omo te fi na lit y inlit igatio n inor de r t o conserve judicial re source s,” Sta te e x r e l. C ihla r v . Cr

awf or d , 39 S.W.3d 172, 178 (Tenn. Ct. App. 2000), to preve nt inconsistent or contradic tory judgments, and to preve nt inattent i o n an d l ack of diligence from unduly prolonging the litigation process. Swe att v . T e nn. D e p’t of Cor r. , 88 S.W.3d 56 7, 57 0 ( Te nn . Ct . A pp . 2 00 2) ; Shan klin v. UT Med. Group, Inc. , No. W1999- 01982-COA-R3- C V, 2000 WL 33191374, at *1 (Tenn. Ct. App. Nov. 6, 2000). Re s ju dic ata is n o t b a s e d on a presumption that the prior f inal judgment was cor

rec t or just; ins tead, it is bas ed o n p u b l ic policy considerations that mandate an end to litigation. Moulton v. Ford Motor C o. , 533 S.W.2d 295, 296 (Tenn. 1976) . To obtain dismissal based on re s ju dic ata , the party asserting the de fense must show that: (1) a c ourt of compe tent jurisdiction render ed the unde rlying judgment; (2) the same pa rties or their privies we re involved in both proc eedings; (3) both proce edings involved the same c ause of action; and ( 4) the unde rlying judgment was final a nd on t he merits. Graham v. Walldorf Prop.-5-

M gm t. , No. E2008-00837- COA-R3-CV, 2009 WL 723837, at *4 (Tenn. Ct. App. Mar . 19, 2009) (citation omitted). Roberts does not dispute t h at t h e Madison County Gene ral Sessions Court is a court of
c omp e te nt j urisd ic tio n o r that the pa rt ie s invo lve d in the prior Ge ne ra l Sess ion s law su it ar e thesa me p arti e s in th e la w s u it in th e Ci r c u it Co u rt b e lo w
. Rath e r , Ro b e rts ar g u e s th a t th e d o ctrine of r es jud ic ata is not applicable be cause : (1) the de fault judgment of the Ma di s o n C ounty Gener al Sessions Court was not a final judgment on the merits; and (2) the two proc eedings did not involve the same c ause of

action.
Final Ju dgment on the Me rits

We c onsider first Roberts’ argume nt that the default judgment against Vaughn in the Madison County Genera l Sessions C ourt was not a final judgment on the merits. Roberts notes that Vaughn’ s failure to appea r pre vented Roberts from conduc ting discovery to determine fac ts such as thea mou nt o f p ro fi ts g e ne rate d b y V aug hn ’s la w f irm, w hic h wo uld de te rm inethea mou nt R ob e rt s was owe d under the Marke ting Consul tant Agre ement. Roberts maintains it was not a judgment on theme ri ts. A judgment is a final judgment “whe n it decide s and dis poses of the whole me ri ts o f the c a se leaving nothing for the f

urther judgment of t h e court.” Richardson , 913 S.W.2d at 460 (c itation omitted). It is not necessa ry to have a trial for

a judgment to be on the merits; rathe r, “[ i]f the pa rties ha d a n o pp ortun ity to b e he ard , a ndthe reareno te c hn ic a l de fects, the j ud gme nt ‘ is o n th e me ri ts, although there was no actua l hearing or argument on the facts of t he ca se.’ ” Hollin s v. Covington Pike Chrysler-Plymouth , Inc. , No. W2002-00492-COA-R3-CV, 2002 W L 31895720, at *1 (Te nn. Ct

. A p p
. D e c
. 2 3 , 2 0 0 2 ) ( q u o ting 50 C.J.S. J ud gm e nts § 7 28 (1 99 7) ). A d e fa ult jud gme nt i s a judgment on the merits for the pur poses of re s ju dic ata

. Mitran o v. Houser , 240 S.W.3d 854, 861 (T e nn . Ct . A pp . 2 00 7) (a

pp lyi ng Ne w H a mps hir e la w) ; see also Cauff v. Fiege r , Fieger, Kenney & Jo hnso n, P

.C. , No. 281442, 2009 WL 187820, at *2 (Mich. C t. App. Jan. 27, 2009). I n this case, the Gene ral Sessions C ourt enter ed a de fault judgment in Roberts’ fa vor, disposing of all issues prese nted to the court at that time. The order was not a ppeale d. It was c learly a final judgment on the merits for pur

poses of re s ju dic ata

.-6- Same Cause of A ction
Rob e rt s a lso c on te nd s th a t res jud ic ata is inapplicable be cause both proce edings did not involve the same c ause of action. The cause in the Gene ral Sessions lawsuit and the c aus e in the Cir c uit Cou rt la ws uit , h e arg ue s, didno t ari se fr om the sam e co ntr a c t, o c c ur re nc e , o r s e t of

fa c ts. He a cknowledge s simil arities in that both suits soughtto rec over m onies from de bts that Vaughn
o w e d Rob e rt s. Howeve r, he note s that the Gene ral Sessions lawsuit conce rned V aughn’s de bt arising out of only the Marke ting Consul tant Agre ement, while, in contr ast, the Circuit Court action
so ug ht t o r e c ov e r m on ie s Ro be rt s lo a ne d to Vaug hn , r e nt V aug hn ow e d Ro be rt s u nd e r the or a l le a se agre ement, as w ell as monies owed under the Marke ting Consul tant Agre ement. In a ddition, in t he Circuit Courtl aw s u i t , R o b er t s s o u g h tt h e d i s co v er y n ec es s ar y t o d et er m i n e t h e e x ac tam o u n tVaughn owed unde r the Mar

keting Consultant Agreeme nt.
Th e Te nn e sse e Sup re me Cou rt ha s a c kn ow le dg e d th e dif fi c ulty inde fi nin g th e te rm “ c aus e of ac tion,” and set a

bout doing so for res judicata pu rp os e s inCreech v. Addington , __ S.W.3d __, No. E2006-01911-SC-R11-CV, 2009 WL 838102, at *12 (Te nn. 2009). In de fining “cause of
ac t ion,” the Court re

jected the approa ch pre viously used, that is, looki ng at “whe ther the primary right and duty or wrong are the s ame in eac h case .” Id. (quoting Ge rb e r v . Ho lc omb , 219 S.W.3d 914, 918 (Tenn. Ct. App. 2006))

. It adopted instea d the “transactional” standard se t forth in the Se c on d Re state me nt. Th e tr a ns a c tio na l st a nd ardpr ov ide s a s f oll ow s:
When a valid and final j u d g m ent rendere d in an ac tion extinguishes the plaintiff’s claim . . . , t h e claim extinguished includes all rights of the plaintiff to re medies against the de fendant with respe ct to all or any pa rt of the transaction, or se ries of
connec ted transa ctions, out of which the a ction arose

. Id. at *13 (quoting R ES TATEMENT (S EC OND ) O F J U D G M EN TS § 24(1) ( 1982)). “ Two suits, theref ore, shall be deemed the same ‘cause of action’ for pur poses of res judicata wher e they arise out of the same transaction or a

series of connec ted transa ctions.” Id. at *14.
Under this standard, we determine first whethe r R o b er t s ’ cla im against Vaughn unde r the Marke ting Consul tant Agreem ent is prec luded under re s ju dic ata . We the n consider w hether the
re ma ini ng c la ims arepr e c lud e d a s w e ll.

Ma rk e ting Cons ulta nt Ag re e me nt
Rob e rt s c on c e de s th a t th e Cir c uit Cou rt lawsu it inc lud e s a

c la im f or br e a c h o f the sa me Marke ting Consultant Agre ement that was the subject of the Gene ral Sessions law suit. He notes that his compensation under

the Agre ement wa s to be a pe rcen t ag e of the prof its from Vaughn’s la w pr a c tic e , a ndstate s th a t he did no t ha ve a ny inf ormatio n o n mo nie s g e ne rate d b y V aug hn ’s la w f irm. Con se qu e ntl y, theGe neral S essi on s ju dg me nt w a s b a se d o n a n e sti mate of Vaug hn ’s pr of

its

. Roberts contends that, in light o f Va u g hn’s fa ilure to appe ar in the G ener al Sessions lawsuit, the
exac t amount duehim under the Mar keting Consultant Agreeme nt “has ne ver be en re veale d” and he “ha s not be en given the opportunity to discover that a mount.” He a rgues, then, that the doctrineR o b e r t s c i t e s t h e f o l l o w i n g l a n g u a g e f r o m Young v. Bar r ow , 1 3 0 S .W .3 d 5 9 (T e n n . C t. A p p . 2 0 0 3 ), in 5

su p p o rt o f h is a rg u m e n t:

A pr i or j udgm ent

. . . doe s not pr ohi bi t t he l at er c ons i der at i on of r i ght s t hat ha d not a cc r ued at t he t i m e of t he ear l i er procee di ng or t he r eexam i nat i on of t he s am e ques t i on bet w een t he s am e par t i es
w hen t he f ac t s ha ve cha nged or ne w f ac t s ha ve occ ur r ed t hat ha ve al t er ed t he l ega l r i ght s a nd relati o n s o f t h e p arti es.

I d. a t 64 ( ci t at i ons om i t t ed)

. How eve r , Rober t s poi nt s t o not hi ng i n t he r ec or d i ndi ca t i ng t hat a ny f ac t s ha ve c h a n g e d o r th a t n e w fa c ts h a v e c o m e to li g h t sin c e th e e n try o f th e G e n e ra l S e ssio n s C o u rt ju d g m e n t.
-7- of re s ju dic ata sh ou ld not app ly t o b ar h is c la im o n th e Ma rk e tin g Co ns ult a nt A gr e e me nt b e c aus e he didno t ha ve a

fu ll andfair

op po rtun ity to l iti gate thec la ims

. The Te nnessee Supreme Court in Creech ob se rv e d that the re we re se ve ra l c ir c ums ta nc e s in which the doc trine of re s ju dic ata should not be applied to bar a second a ction, even if

it arises out of thesa me tr a ns a c tio n a s th e fi rs t la ws uit . I t no te d s pe c if ic a lly thee xc e pti on on wh ic h Ro be rt s se e ks to r e ly, statin g th a t “ e ve n w he retw o c la ims ari se ou t of thesa me tr a ns a c tio n, these c on d s uit is not barre d by re s ju dic ata unless the plaintiffs had the o p p o rt u n i t y in the first suit to fully and fairly litigate the pa

rticular issue giving rise to the se cond suit.” Id.

It is u nc le ar w he the r Rob e rt s is a sse rt ing that he wa s not giv e n a f ull a ndfair

op po rtun ity to litigate his claim because the Ge nera l Sessions C ourt has a limited j urisdictional amount and may be less conducive to conduc ting discovery. Rega rdless, Roberts chose the forum in which to f ile the fi rs t la ws uit . T he plaint if f mus t a sse rt

thec la im “ ini tia lly in the fo ru m w iththebr oa de st p os sib le jurisdiction.” Hump hre

y v . T har ald so n Ente rs. , 95 F.3 d 6 2 4 (7th Cir. 1996) (c itation omit ted). “The plainti ff , having voluntarily brought his action in a c ourt which c an grant him only l imited
r e li e f, c a n n o t in s is t u p o n main tain in g a n o th e r a c ti o n o n th e c laim.” R ES TATEMENT (S EC OND ) OF J UDG MEN TS § 24 cmt. g (1982).

Inthea lte rn a tiv e , Ro be rt s may b e arg uin g th a t hedidno t ha ve a fu ll a nd fair op po rtun ity to litigate the claim bec ause V aughn failed to appea r in the first ac tion. This li kewise c annot be use d as a shield a gainst the application of the doctrine of re s judi cata . When Robe rts rea lized that Vaug hn wa s n ot g oin g to app e ar f or theGe ne ra l Se ssi on s la ws uit , Robe rt s had a c ho ic e . He c ou ld choose to non-suit the c ase and re- file in Circuit Court, or he could c hoose to go forwa rd and ta ke
a de fa ult jud gme nt. He c ho se a

de fa ult jud gme nt. Ha vin g c ho se n to tak e a defa ult jud gme nt, if Rob e rt s b e lie ve d th a t th e a mou nt of the Ge ne ra l Sess ion s def ault jud gme nt w a s in a de qu a te , h e c ou ld have a ppeale d to Circuit Court. See T.C.A. § 27-5-108 (2000 & Supp. 2008). He failed to do so, and chose instead t o file a new law suit in C ircuit Court sever al months later. Roberts simply has not
e sta bli sh e d th a t hewa s “ pr e ve nte d” fr om f ull y a ndfair ly l iti gatin g h is c la im. 5 Taking Roberts’ a

rgument to its logical conclusion make s the rea son for a pplying the doctrine of re s ju dic ata to this claim clea r. One basis for ap plying re s ju dic ata is to prevent inc on sis te nt o r c on tr a dic tory ju dg me nts

. If Rob e rt s we re pe rm itt e d to go fo rw ard wi th the Cir c uit Court claim on the Marke ting Consul tant Agre ement and obtain a judgment, he would then ha ve two-8-

judgments against Vaughn on the same c ontrac t. Is he permitted to choose to exec ute on the lar ger of the two judgments? Can he exec ute on both judgments? If the Circuit Co u rt cl ai m we re dis mis se d o n th e me ri ts, c ou ld R ob e rt s th e n g o b a c k a nde nf or c e theGe ne ra l Se ssi on s ju dg me nt? Clearly the doc trine of re s ju dic ata sh ou ld b e app lie d to ba r R ob e rt s’ Cir c uit

Cou rt c la im based on the September 2004 Ma rketing C onsultant Agree ment. The trial c ourt’s grant of summary judgment is affirmed a s to the Circuit Court claims arising out of the Mar k et ing Consult ant Ag re e me nt.
Re maining Cla ims

We now consider w hether the doctrine of re s ju dic ata should be applied to bar the re mainder of Roberts’ c laims. Roberts’ remai n i n g claims do not arise out of the Marke ting Consul tant Agre ement. Rather , they arise out of the other c ontrac ts and business dealings betwe en the sa me two part i e s d u r i n g t h e t i m e f

r a m e i n w h i c h t h e M ark e t i n g C o n s u l t a n t A g r e e m e n t w a s i n f o rc e . T he se claims wer e, of c ourse, not litigated in Roberts’ Gene ral Sessions lawsuit against Vaughn. Nonethele ss, the doctrine of re s ju dic ata c a n a pp ly t o b ar a

se c on d s uit

on matte rs that “ could have been litigated in the former suit.” Richardson , 913 S.W.2d at 459 (e mphasis added)

. A prior judgment “does not prec lude everything that might have bee n disputed betwee n the parties, but only matters within a certain sphere .” 18 C H A RL ES A LA N W R I GHT , A RTH U R R. M I LLE R & E DW AR D H. C OOPER , F EDERAL P R AC TI C E AND P ROCE D U RE § 4406 (2009). The pre clusive scope of the prior

judgment depends on de fining the brea dth of the cause of a ction in the first lawsuit. Id. “The proce ss of defining the . . . c ause of action is thus aimed at def ining the matters that both might and sh ou ld

have be en advanced in the f irst liti gation.” Id.

Be c a u s ethe Tenne ssee Supre me Court in Creech ad o p t ed the fe deral “transactional” standa rd for de termining the brea dth o f a “c au s e of action” for re s ju dic ata purposes, we must determine wh e ther t hes e rema ini ng c la ims we re“ pa rt of thetr a ns a c tio n, or

se ri e s o f c on ne c te d tr a ns a c tio ns , out of which [Roberts’ Gene ral Sessions] a ction arose .” Creech , 2009 WL 838102 at *13 (quoting R ES TATEMENT (S EC OND ) O F J UDG MEN TS § 24(1) (1982))

. Under the transa ctional appr oach a dopted in Creech , “ ‘t h e co ncept of a tra nsaction is . . . used in the broa d sense,’ and ‘c onnotes a natural grouping or common nucle us of oper ative fa cts.’ ” Id. (quoting R E S T AT E MENT (S EC OND ) OF J U D G M EN TS § 2 4 c mt. b ( 19 82 ))

. Th e Re state me nt d e sc ri be s th e tr a ns a c tio na l st a nd arda s f oll ow s:
What f actua l grouping constitutes a “transaction”, and what groupings constitute a “series”, a re to be determined pragmatically, giving weight to such considerations as whether the facts are related i n time, space , origin, or m otivation, whether they form
a c on ve nie nt tr ia l unit , an d whe the r the ir tr e a tme nt as a un it co nf orms to the pa

rt ie s’ expec tations or business understanding or usa ge.
R E S TATEMENT (S EC OND ) O F J U D G M EN TS § 2 4 (2 ) ( 1 9 8 2 ). T h e C o u rtn o t ed t h att h e t er m“t ra n saction” for the pur

poses of re s ju dic ata “is intended to be analogous to t he phra se ‘transaction or oc curr ence ’
as used in the Federa l Rules of Civil Procedur e.” Creech , 2 00 9 W L 8 38 10 2, a t *1 3 ( c iti ng Fe d. R. Civ. P . 13(a) (1) ( ref

erring to “tra nsaction or occur renc e” as used in the fe dera l rule on compulsory-9-

counter claims); Fed. R. Civ. P . 15(c) (1)( B) (re fer ring to “ transac tion or

occur renc e” a s used in the fe de ra l ruleon re latio n b a c k o f an a me nd me nt t o a ple a din g) ). Th e re fo re , we loo k to fe de ra l c a se law for guidance

. The Sixth Circuit applies a “logical relationship” t est to determine whether claims arise out of the same “tra nsaction or oc curr ence ” as the phrase is used in t h e fe d er al rul e on compulsory counter claims. Sand

e rs v . Fir st N at’ l Ba nk & Trust C

o. in G re at B e nd , 936 F.2d 273, 277 (6th Cir. 19 91 ) ( de te rm ini ng wh e the r a c ou nte rc la im w a s c omp uls ory u nd e r Fed . R. Civ. P. 13( a )) . Und e r this approa ch, claims arise out of the same transaction or oc curr enceif “the issues of law and f act r aised by the claims ar e lar gely the same and whe ther sub stantially the same evide nce w ould support or ref ute both claims.” Id. (citing Mo or e v . N .Y . Co tto n Exc h. , 270 U.S. 593 (1926)).

In Suddar th v. Househol

d Commercial Fi n. Servs., Inc. , No. M2004-01664-COA- R3-CV, 2006 WL 334031 (Tenn. Ct. App. Feb. 13, 2006), the Middle Section of the Court of Appea ls looked at the phrase “tra nsaction or occur renc e” in a ddressing whether certain claims wer e co m p u lsory counter claims un d er the Feder al Rules of Civil P roce dure. I n that case , the Suddarths wer e principals of Americ an National Home Mortgage, Inc. ( “American National”). Id. at *1. American National had e ntere d into a cre dit agree ment with Household Commercial Financia l Services, Inc

. (“H ousehold”). Id. at *3. The Suddarths entere d into a guaranty agre ement in fa vor of House hold, making the Suddarths per sonally liable to Household in the event that Americ an National def aulted on the cr edit agre ement. Id. After Americ an National defau l ted on the loans a nd went out of business, Household sued the Suddarths in feder al district court on the gua ranty agree ment for the defic iency owe d by Americ an National. Id. Intheorigi na l a c tio n in fe de ra l c ou rt , H ou se ho ld obtained summary judgment against the Suddarths on the guaranty agre em en t

. This was not appea led. Id. at *1. Threemonths later, the Suddarths filed a lawsuit against Household and two ind ivi du a l de fe nd a nts in D a vid so n Co un ty C ir cuit Cou rt , a lle gin g f

ra ud , f ra udin the ind uc e me nt, a ndc ivi l c on sp ir a c y a

ri sin g o ut o f the sa me gu aranty a nd c re dit a gr e e me nts a t issu e in the a c tio n in fede ral c ourt. Id. at *2. H ousehold filed a motion for summary judgement, alleging that the Suddarths’ cla ims were ba rre d by, among other things, F ed er al Rule of Civil P roce dure 13( a) rega rding compulsory counte rcla ims. Id. T h e tria l c o u rt g r a n te d th e motion. I d. The Suddarths appe a le d , ar g u in g th a t th e ir f r au d a n d c o n s p ir a c y c laim s w e r e n o t c o mp u ls o r y c o u n te r c laims that sh ou ld h a ve be e n f

ile d inthefe de ra l la ws uit

. Th e Cou rt

of Appeal s app lie d th e “ log ic a l r e latio ns hip ” te st f ro m Sand

e rs to determine whether the claims that the Suddarths attempted to asse rt wer e compulsory c ounterc laims. Id. at *3. Th e Cou rt

ma de thefo llo wi ng ob se rv a tio n o n th e re latio ns hip be tw e e n th e tw o a c tio ns :
It is undisputed the former action arose out of t he same business relationship betwee n the Suddarths and Household at i ssue i n the present action, and specific ally out of the guaranty agre ement sued on in the former a ction. Because both the first suit and the second suit arose out of the same tr ansac tion or occur renc e, the gua

ranty a gree ment betwee n the Suddarths and Household, we find the t wo ac tions are logica lly related.
Id. at *4. Likewise, to de termine whe ther c laims in a second law s u i t arise out of a “se ries of
connec ted transa ctions” in r elation to c laims subjec t to a prior judgment, we look at whe ther a ll are-10-

part of “ a series of logically re lated tra nsactions.” Abraham v. V olkswagen of A m., Inc. , 795 F.2d 238, 251 (2nd C ir. 1986) (determining whether Fed. R. Civ. P . 20(a) rega rding permissive joinder of parties was satisfied)

. In the c ase at bar, to dete rmine whe ther the claim asserted i n the origi nal Gene ral Sessions action and those asserted in the l ater Circuit Court action constit ute t he same cause of action for res judicata purposes, we examine whether they arise out of the same transac tion or series of connec ted tr a n s a c tions. Creech , 200 9 W L 8 38 10 2, a t *1 4. IntheGe ne ra l Se ssi on s a c tio n, Rob e rt s su e d to collect money that Vaughn allegedly owed him unde r the Marke ting Consul tant Agre ement. In the Circuit Court action, Roberts sought to collect money that Vaughn a llegedly owed him for a series of loans , f or un pa id r e nt u nd e r an ora l lea se a gr e e me nt, fo r pr oc e e ds fr om a re fu ndc he c k a lle ge dly
rec eived by Va

ughn for a dvertising paid for by Robe rts, for supplies Roberts purc has e d f o r V a u g hn’s la w f irm, andfo r m on ie s a lle ge dly ow e d b y V aug hn un de r the Ma rk e tin g Co ns ult a nt A gr e e me nt.
Inhis a ff ida vit in s up po rt

of the motio n f

or su mma ry jud gme nt, Vaug hn state s th a t bo th actions “r egar ded the sa me fa cts and business relationship betwee n the parties . . . which is the issue of t h e [Ma rketing Consultant Agree ment].” H is affida vit includes no fac ts to support thi s conclusory statement. The question of whether claims in a second lawsuit are prec luded under the doctrine of
re s ju dic ata is determined “on a c ase- by-ca se basis, with sensitivity t o the fa cts of ea ch proc eeding.” Id

. Vaughn cites no fac ts indicating that all of the matters in the Ge neral Sessions l awsuit and the subsequent Circuit Court lawsuit arise out of a “common nucleus of ope rative f acts” or “a

re r elated in time, space, origin or motivation” or whe ther they w ould all “form a convenie nt trial unit.” Id.
a t *1 3; R ES TATEMENT (S EC OND ) O F J UDG MEN TS § 24(2) ( 1982).

Intere stingl y , R o berts’ a ffidavit submitted in oppositi on to Vaughn’s summary judgment motion, appear s to bolster Vaughn’s de fense of re s ju dic ata . Roberts’ af fidavit indicates that all of the matters in contr oversy arose out of the pa rties’ ove rall business re lationship, roughly corre lating with the time period in which the Marke ting Consultant Agre ement was in forc e. Roberts gives no
rea son for not litigating all of these claims at t he ti me he filed t he Ge nera l Sessions l awsuit; he gives no indication that these additional claims were not then known to him, and does not ref er to a nything that w o u ld h a v e p r e v e n te d h im f r o m li ti g a ti n g a ll o f th e c laim s a g a in s t V au g h n a t th a t time. See Index Fun d, Inc. v. Hagopian , 677 F. Supp. 710, 716 (S .D.N.Y. 1987) (cla im preclusion applied to a serie s of sec urities transac tions).

Neve rtheless, a s noted above , Vaughn ha d the burde n of establishing fac ts showing that the doctrine of re s ju dic ata should be applied to bar Roberts’ Circuit Court lawsuit. The c onclusory state me nt i n h is a ff

ida vit is i ns uf fi c ie nt t o e sta

bli sh that th e matte rs in the Ci rcui t Cou rt la ws uit (exc ept for those involving the Marketing Consultant Agree ment) ar e part of the same transaction
or series of conne cted transactions as the Genera l Sessions judgm ent. See Bla nc har d v . Ke llum , 975 S.W.2d 522, 525 (Tenn. 1998). Unlike in Sudd ar th , wher e it was c lear

that the claims in the sec ond action ar ose out of the gua ranty and cre dit agree ments that wereat issue in the original ac tion, in the prese nt case , it is not clea

r how the M arke ting Consul tant Agre ement is logically related to the other debts that Roberts sought to collect in the C ircuit Court action because Vaughn f ailed to explain the relationship between them. Se e Sand e rs , 9 36 F.2 d at 27 7; Sudd ar th , 2 00 6 W L 3 34 03 1, a t *4. Th us , Vaughn failed t o car

ry hi s burden establishing the affirmative de fense of res judicata a s to Rob e rt s’-11-

c la ims fo r mon ie s a lle ge dly ow e d h im f or these ri e s o f l oa ns ma deby Rob e rt s to Vaug hn , f or un pa id rent under the oral lease agre ement, for the supplies pur chase d by Roberts, or for the proc eeds f

rom the re fund che ck allegedly rec eived by Vaughn for advertising purc hased by Roberts on Vaughn’ s behalf . There fore , the trial court’s grant of summary judgment a s to those claims must be reve rsed.
C ONCL US I ON
Ac c or din gly , th e gr a nt o f s umm ary jud gme nt i n f a vo r o f V aug hn is af

fi rm e d as to the c la ims arising out of the pa

rties’ Mar keting Consultant Agreeme nt. As to a ll r emaining claims, the grant of summary judgment is reve rsed.
The de cision of the trial c ourt is affirmed in part, re verse d in part, and remande d for f urther proce edings consistent with this Opinion. Costs of t his appea l are taxed to the Appe llee, William D. Vaughn, f

or which e xecution may issue if ne cessa ry.

___________________________________ HOLLY M. K IRBY, JUDGE