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### STATE OF MICHIGAN

COURT OF APPEALS

GARY STEPHEN GARRETT,

Plaintiff-Appellant, FOR PUBLICATION February 23, 2016
9:00 a.m.

v No. 323705 Wayne Circuit Court DARITA CAMILLE WASHINGTON, LC No. 14-005222-NI

Defendant,

and

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY,

Defendant-Appellee.

Before: R IORDAN , P.J., and J ANSEN and F ORT H OOD , JJ.

P ER C URIAM

.
Plaintiff appeals as of right fr om the trial court’s order of voluntary dismissal of the claim against Darita Washington (Washi ngton) without prejudice, whichfollowed its order granting summary disposition in favor of defendant State Farm Mutual Aut omobile Insurance Company (State Farm) in this no-fault action. Because we are bound to follow this Court’s decision in
Adam v Bell , ___ Mich App ___; ___ NW2d ___ (2015), pursuant to MCR 7.215( J)(1), we
reverse the trial court’s decisi on to grant summary dispositionin favor of State Farm and remand for further proceedings consistent with this opinion. However, were it not for this Court’s
decision in Adam , we would affirm the trial court’s decision to grant summary d isposition in favor of State Farm. Therefore, we declare a conflict with Adam pursuant to MCR 7.215(J)(2).

I. FACTS AND PROCEDURAL HISTORY

This case arises from a January 4, 2013 automobile accident in volving plaintiff and Washington. At the time of the accident, plaintiff had a no-fa ult insurance policy with State Farm. On June 3, 2013, plaintiff filed a complaint against Sta te Farm that sought personal protection insurance (PIP) benefi ts, thus instituting the “orig inal action.” The original action proceeded to case evaluation and was ultimately settled by mutu al acceptance of the case evaluation award, as indicated in a February 20, 2014 notice of the results of the case evaluation.-2- The trial court subsequently dismissed the action at a settleme nt conference on April 22, 2014. On April 22, 2014, the same day as the settlement conference inthe original action, plaintiff filed a third-party complaint in the instant case, alleging a neglige nce claim against Washington and a breach of contract claim against State Farm for uninsured motor ist (UM) benefits in the amount of $20,000. Plaintiff filed a motion to consolidate the origin al action and the instant action. On May 5, 2014, the trial court entered a final order in the origi nal action, which denied plaintiff’s motion to consolidate the two cases and dismissed the original action with prejudice. On May 28, 2014, State Farm filed an answer in this case and asserted, as an affirmative defense, that plaintiff’s claim for UM bene fits was barred by the doctrine of res judicata.

On June 10, 2014, State Farm moved for summary disposition und er MCR 2.116(C)(4) (lack of subject-matter jurisdiction), (C)(7) (claim barred as a matter of law), and (C)(8) (failure to state a claim on which relief can be granted), arguing that (1) the trial court lacked subjectmatter jurisdiction over the claim against State Farm since pla intiff only requested $20,000 in UM benefits, (2) plaintiff’s claim for UM benefits could have b een resolved in the original action, and, therefore, was barred by res judicata, and (3) pla intiff’s claim was barred under the compulsory joinder rule, MCR 2.302(A). Plaintiff filed a respo nse on July 11, 2014, contending that (1) the trial court had s ubject-matter jurisdiction since the total amount in controversy against all defendants exceeded $25,000, (2) plaintiff’s claim for UM benef its was not barred by res judicata since the claim for UM benefits was fundamentally different than the claim for PIP benefits, and (3) the compulsoryjoinder rule did not require p laintiff to join his claim for UM benefits in the original action. The trial court held a hearin g on the motion for summary disposition on July 18, 2014. Plaintiff’s attorney argued that the trial court had subject-matter jurisdiction over the case because the claims against both Stat e Farm and Washington exceeded $25,000, to which the trial judge eventually responded, “Okay.” The trial court determined that plaintiff’s claim for UM benefits was barred by the doctrine of res judicata. The trial court followed the reasoning in this Court’s unpublished decision in Graham v State Farm Mut Auto

Ins Co , unpublished opinion per curiam o f the Court of Appeals, issue d February 18, 2014 (Docket No. 313214), and granted summary disposition in favor o f State Farm. The trial court entered an order on July 22, 2014, dismissing the case against State Farm with prejudice. On August 27, 2014, the trial court entered an order of voluntary dismissal without prejudice with regard to the remaining claim aga inst Washington, which constituted the final orde r in the case.

II. RES JUDICATA

On appeal, plaintiff argues thatthe trial court erred in dete rmining that res judicata barred his claim for UM benefits. We are required to reverse and remand on the basis of this Court’s
decision in Adam . However, we believe that Adam was wrongly decided.

We review de novo both a trial court’s decision on a motion fo r summary disposition and its application of the legal doctrine of res judicata. Bryan v JPMorgan Chase Bank , 304 Mich App 708, 713; 848 NW2d 482 (2014). “In determining whether sum mary disposition under MCR 2.116(C)(7) is appropriate, a court considers all documentary evidence submitted by the parties, accepting as true the contents of the complaint unless affidavits or other appropriate documents specifically contradict them.” Blue Harvest, Inc v Dep’t of Transp , 288 Mich App 267, 271; 792 NW2d 798 (2010).-3- “ ‘The doctrine of res judicata is intended to relieve parties of the cost and vexation of multiple lawsuits, conserve judicial resources, and encourage r eliance on adjudication, that is, to foster the finality of litigation.’ ” Bryan , 304 Mich App at 715 (citation omitted). For res judicata to preclude a claim, three elements must be satisfied: “(1) the prior action was decided on the merits, (2) both actions involve the same parties or the ir privies, and (3) the matter in the second case was, or could have be en, resolved in the first.” Adair v Michigan , 470 Mich 105, 121; 680 NW2d 386 (2004). “[T]he bur den of proving the applica bility of the doctrine of res judicata is on the party asserting it.” Baraga Co v State Tax Comm , 466 Mich 264, 269; 645 NW2d 13 (2002).

Both parties to this action were parties to the original actio n, and it is undisputed that the original action was decided on its merits. In any event, “acce ptance of a case evaluation is essentially a consent judgment,” CAM Constr v Lake Edgewood Condo Ass’n , 465 Mich 549, 555; 640 NW2d 256 (2002), and “[r]es judicata applies to consen t judgments,” Ditmore v
Michalik , 244 Mich App 569, 576; 625 NW2d 462 (2001). Consequently, th e dispute in this matter is regarding the third element for res judicata, i.e., w hether plaintiff’s claim for UM
benefits is a claim that could have been litigated in the original action. See Adair , 470 Mich at
121.

Our Supreme Court “has taken a broad approach to the doctrine of res judicata, holding that it bars not only claims already litigated, but also every claim arising from the same transaction that the parties, exercising reasonable diligence , could have raised but did not.”
Adair , 470 Mich at 121 (emphasis added). Accordingly, under the thi rd element for res judicata, Michigan courts employ the broad, pragmatic “same transaction t est,” often referred to as the “transactional test,” rather than the narrower “same evidence t est.” Id . at 123-125. Thus, while the question of whether the same evidence is necessary to suppo rt claims “may have some relevance, the determinative question is whether the claims in the instant case arose as part of the same transaction as did [the plaintiff’s] claims in” the origin al action. See id . at 125. Under the transactional test, “ ‘a claim is viewed in “factual terms” and considered “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.” ’ ” Id . at 124 (citation omitted; emphasis added). The Court expl ained that “ ‘[t]he “transactio nal” test provides that “the
assertion of different kinds or theories of relief still consti tutes a single cause of action if a single group of operative facts give ris e to the assertion of relief.” ’ ” Id . at 124 (citation omitted). “ ‘Whether a factual grouping constitutes a transaction for purpo ses of res judicata is to be determined pragmatically, by considering whether the facts are related in time, space, origin or

motivation , [and] whether they form a convenient trial unit . . . .’ ” Id . (alteration in original), quoting 46 Am Jur 2d, Judgments, § 533, p 801.

In deciding this case, the trial court followed the reasoning in Graham , rather than the contrary reasoning in Miles v State Farm Mut Auto Ins Co , unpublished opinion per curiam of the Court of Appeals, issued Ma y 6, 2014 (Docket No. 311699). Since the trial court decided this matter, however, this Court explicitly adopted much of the reasoning from Miles in Adam

. See Adam , ___ Mich App ___; slip op at 3-5. The plaintiff in Adam “was injured when she was struck by a vehicle driven by Susan Bell.” Id . at ___; slip op at 1. Adam subsequently filed a complaint against her no-fault in surer asserting a claim for PI P benefits and, after settling that claim with her insurer, stipulated to the entry of an order of dismissal with prejudice. Id . at ___;-4- slip op at 1-2. Roughly two months later, Adam “filed a third- party complaint alleging negligence against Susan Bell, a claim of owner liability again st [the owner of the vehicle involved in the accident], and a claim of breach of contract ag ainst [the insurer] with respect to uninsured motorist (UM) benefits.” Id . at ___; slip op at 2. The insurer moved for summary disposition, arguing that Adam’s UM claim was barred by res jud icata, and the trial court agreed.
Id . There was “no dispute . . . that the prior action . . . invo lved the same parties and was decided
on the merits.” Id . Thus, the only dispute was “whether the two actions arose fr om the same transaction such that [the] plai ntiff in the exercise of reason able diligence could have but did not raise [her] UM claim during the prior action[.]” Id . Accordingly, the Adam Court applied the transactional test for res judica ta and decided that, despite h er prior action against the insurer for PIP benefits, res judicata di d not bar the plaintiff’s new clai ms:

Using this pragmatic approach, we conclude that although plaint iff’s PIP claim and plaintiff’s tort/UM contract claim both arise from the same automobile accident, the claims also have significant differences in the m otivation and in the timing of asserting the claims, and they often do not form a co nvenient trial unit. Further, applying res judicata to the facts of this case would not promote fairness
and would be inconsistent with the Legislature’s intent express ed through the nofault act. The no-fault act provides for the swift payment of no-fault PIP benefits. On the other hand, it severely re stricts the right to bring thi rd-party tort claims that would form the basis for a UM contract claim. [ Id . at ___; slip op at 3.]

In reaching the decision, th is Court noted that it found Miles both “instructive and persuasive,” explicitly adopti ng the following pertinent portio ns of the reasoning from Miles :

It is plain that both Miles’ claim for PIP benefits and his cl aim for [UM] benefits arise from the same accident and involve the same inju ries and insurance policy. For that reason, there is a substantial overlap betwee n the facts involved
with both claims. But that bein g said, there are also signific ant differences between the two types of claims.

A person injured in an accident arising from the ownership, op eration, or
maintenance of a motor vehicle as a motor vehicle is immediatel y entitled to PIP benefits without the need to prove fault. See MCL 500.3105(2); MCL 500.3107. The PIP benefits are designed to ensure that the injured personreceives timely payment of benefits so that he or she may be properly cared for during recovery. Shavers v Attorney General , 402 Mich 554, 578-579; 267 NW2d 72 (1978). Moreover, the injured person has a limited period within which to sue an insurer for wrongfully refusing to pay PIP benefits. See MCL 500.3145( 1). Because an injured person is immediately e ntitled to PIP benefits without regard to fault, requires those benefits for his o r her immediate needs, and maylose the benefits if he or she does not timely sue to recover when those benefits ar e wrongfully withheld, the injured person has a strong incentive to bring PI P claims immediately after an insurer deni es the injured p erson’s claim for PIP benefits.

In contrast to a claim for PIP benefits, in order to establish his or her right to [UM] benefits, an injured person must—as provided in the ins urance-5- agreement—be able to prove fault: he or she must be able to est ablish that the uninsured motorist caused his or her injuries and would be liab le in tort for the resulting damages. See Auto Club Ins Ass’n v Hill , 431 Mich 449, 465-466; 430 NW2d 636 (1988). Significantly, this means that the injured pe rson must plead and be able to prove that he or she suffered a threshold injury

. Id . at 466, citing MCL 500.3135(1). Except in accidents involving death or perman ent serious disfigurement, an injured person will therefore be required to show that his or her injuries impaired an important body function that affects the i njured person’s general ability to lead his or her normal life in order to meet the threshold. MCL 500.3135(1) and (5). This in turn will often require proof of the nature and extent of the injured person’s injuries , the injured person’s prognosi s over time, and proof that the injuries have had an adverse effect on the injur ed person’s ability to
lead his or her normal life. See McCormick v Carrier , 487 Mich 180, 200-209; 795 NW2d 517 (2010). Thus, while an injured person will likely have all the facts necessary to make a meaningful decision to pursue a PIP c laim within a relatively short time after an accident, the same cannot be sai d for the injured person’s ability to pursue a claim for [UM] benefits. Finally, an injured person’s claim for [UM] benefits involves compensation for past and futu re pain and suffering and other economic and noneconomic losses rather thancompensation for immediate expenses related to the injured person’s care and recovery. See Dawe v Bar-Levav & Assoc (On Remand) , 289 Mich App 380, 408-410; 808 NW2d 240 (2010) (discussing the nature of the economic and none conomic damages that are awarded in negligence actions). Consequently, a claim for PIP benefits differs fundamentally from a claim for uninsured motor ist benefits both in the nature of the proofs and the motivation for the claim. [ Id . at ___; slip op at 3-4 (citation and quotation marks omitted).]

The Adam Court found that conclusion to be further supported by the “ba se one-year limitations period” and the “one-year-back rule” applicable to PIP claims, under MCL 500.3145(1), which has been found unreasonable as appl ied to contractual claims fo r UM benefits. Id . at ___; slip op at 5. Therefore, the Adam Court ultimately held that “applying res judicata to essential ly require mandatory joinder of a mere potential UM claim with a PIP claim would be inconsistent with the very divergent statutory treatment of these two very different types of no-fault claims.” Id . at ___; slip op at 5-6. Accordingly, the Adam Court reversed the trial court’s grant of summary disposition to the insurer and remanded the matter for further proceedings in the trial court. Id

. at ___; slip op at 6.

Adam is controlling over the instant case. In both cases, the plai ntiff initially filed a lawsuit for PIP benefits, which was settled before the plaintif f filed a claim for UM benefits. See
Adam , ___ Mich App at ___; slip op at 1-2. Thus, this Court’s hold ing in Adam that the doctrine of res judicata does not bar a cla im for UM benefits that was f iled after settlement of a claim for PIP benefits also appl ies in this case. See id . at ___; slip op at 5. Accordingly, we are compelled to conclude that the doctrine of res judicata does not bar plai ntiff’s claim for UM benefits. See
id

.
However, we disagree with the holding in Adam

, and we would conclude that the claim
for UM benefits in this case is barred by the doctrine of res j udicata if we were we not bound to-6- follow Adam . The two claims in this case arise from a single group of ope rative facts. See
Adair , 470 Mich at 124. The PIP and UM claims stem from the same au tomobile accident and involve all of the same parties. Furthermore, the claim for PI P benefits and the claim for UM benefits are related in time, space, origin, and motivation, an d the combination of the two claims form a convenient trial unit since they involve the same partie s, the same automobile accident, and the same body of law. See id . at 125. Furthermore, applica tion of the doctrine of res judicata in this case would relieve the parties of the costs an d vexation of multiple lawsuits involving the same parties and the same automobile accident, wo uld conserve judicial resources, and would encourage the finality of litigation. See Bryan , 304 Mich App at 715. Accordingly,
we would conclude that the two claims constitute the same trans action if we were not bound to
follow Adam . See Adair , 470 Mich at 124.

In addition, we are not persuaded that there are significant d ifferences in the timing and motivation for asserting the claims that would prohibit the app lication of res judicata. Plaintiff filed the UM benefits case approximately two months after settl ing the PIP benefits case and approximately two weeks before the final order was entered in t he PIP benefits case. Additionally, the UM benefits case was filed on the day that th e trial court determined that it would dismiss the PIP benefits case following the case evaluati on settlement. The fact that plaintiff filed the UM benefits case approximately two months a fter settling the PIP benefits case indicates that plaintiff could have sought to amend the complai nt in the original action to include a claim for UM benefits before accepting the case evaluation aw ard if he had exercised reasonable diligence. There is no indication that plaintiff attempted to amend his complaint in original action to include a claim for UM benefits. Instead, h e filed a separate complaint after settling the PIP benefits case and attempted to consolidate the two cases. The timing of the two cases also undercuts plaintiff’s argument that he did not have all of the information necessary to bring a UM claim at the time of the original action since plain tiff brought the claim for UM benefits only two months after settling the PIP benefits case. Although plaintiff argues that he
could not have known th e nature and extent of his injuries at t he time he filed his PIP lawsuit, he fails to substantiate his argument. Based on the timing of the filing of the two cases, we are not persuaded that plaintiff had insufficient information about his physical condition to warrant the filing of a UM benefits claim at the time of the PIP benefits c laim. See Adair , 470 Mich at 125.

We are also unpersuaded by plaintiff’s argument that the two c laims differed in terms of the form of relief granted. As the Michigan Supreme Court clar ified in Adair , the same transaction test applies “regardless of the . . . variant forms of relief flowing from [the substantive] theories.” Adair

, 470 Mich at 124 (citation and quotation marks omitted). Thus, it
is clear that the fact that the PIP benefits claim and the UM b enefits claim involved different
forms of relief did not affect t he analysis with regard to whether the two claims constituted the same transaction for res judicata purposes. See id . Plaintiff points out in his brief on appeal that
he could not have known that he was entitled to UM benefits at the time he filed the original action and would not have been able to obtain the requisite pro of to sustain a UM benefits case. Plaintiff essentially argues that the doctrine of res judicata does not apply since the two claims
involved different evidence. See id . (“ ‘[T]he same evidence test is tied to the theories of relie f asserted by a plaintiff, the result of which is that two claims may be part of the same transaction, yet be considered separate causes of action because the evidenc e needed to support the theories on which they are based differs.’ ”) (citation omitted). Howev er, the “same evidence” test was rejected in favor of the “same transaction” test in Michigan. See id . at 124-125. Under the-7- “same transaction” test, the requirement is that a single group of operative facts gives rise to the
claims of relief. Id . at 124. As discussed above, the PIP benefits claim and the U M benefits claim were part of the same transaction. Consequently, under t he broad approach to determining whether a claim is barred by res judicata, we conclude that the matter in the instant case could have been brought in the original action involving the PIP bene fits claim. See id . at 121. However, because we are bound by this Court’s decision in Adam , we are compelled to reverse and remand for further proceedings. See Adam , ___ Mich App ___; slip op at 6.

III. MOOTNESS

State Farm asserts two alternative grounds for affirmance: moo tness and compulsory joinder under MCR 2.203(A). First, State Farm contends that th e issue raised by plaintiff in this appeal is moot because, when he voluntarily dismissed Washingto n from this action in the trial court, plaintiff foreclosed any opportunity to gain a judgment against Washington, which he
must do in order to collect UM be nefits from State Farm. We di sagree.

We review de novo whether an issue is moot. See Thomas M Cooley Law Sch v Doe 1

, 300 Mich App 245, 254; 833 NW2d 331 (2013). This Court does no t decide moot issues. Id

. “A matter is moot if this Court’ s ruling ‘cannot for any reason have a practical legal effect on the existing controversy.’ ” Id . (citation omitted). “In order to appeal, a party must be an aggrieved party.” Kieta v Thomas M Cooley Law Sch , 290 Mich App 144, 147; 799 NW2d 579 (2010). “On appeal, the litigant must demonstrate that he or she is aff ected by the decision of the trial
court.” Id . “An issue becomes moot when a subsequent event renders it im possible for the appellate court to fashion a remedy.” Id

.

The trial court’s order dismissi ng Washington from this actionexplicitly denotes that the dismissal was without prejudice. “ ‘A dismissal of a suit with out prejudice is no decision of the controversy on its merits, and leaves the whole subject of liti gation as much open to another suit as if no suit had ever been brought.’ ” Grimmer v Lee , 310 Mich App 95, ___; ___ NW2d ___ (2015); slip op at 4, quoting McIntyre v McIntyre , 205 Mich 496, 499; 171 NW 393 (1919) (citation omitted). “[T]he term ‘without prejudice’ signifies ‘a right or privilege to take further legal proceedings on the same subject, and show that the dismis sal is not intended to be res adjudicata of the merits.’ ” Grimmer , 310 Mich App at ___; slip op at 4, quoting McIntyre , 205 Mich at 499. Thus, Washington’s dismissal from this action—without prejudice—does not preclude plaintiff from asserti ng his negligence claim against her at some point in the future. See
id . State Farm’s argument regardi ng mootness necessarily fails a s a result.

IV. COMPULSORY JOINDER

State Farm further argues that, under the compulsory joinder r ule, MCR 2.203(A), plaintiff’s claim for UM benef its in this action is barred beca use he failed to join that claim in the original action. Because we are bound to follow this Court’s d ecision in Adam , we disagree.

We review de novo the proper interpretation and application of a court rule. Haliw v Sterling Hts , 471 Mich 700, 704; 691 NW2d 753 ( 2005). State Farm argued th at summary disposition was proper under MCR 2.116(C)(8). “ ‘A motion for summary disposition under MCR 2.116(C)(8) tests the legal sufficiency of a complaint.’ ” Diallo v LaRochelle , 310 Mich-8- App 411, 414; 871 NW2d 724 (2015) (citation omitted). “ ‘The m otion should be granted if no factual development could possibly justify recovery.’ ” Id . (citation omitted). MCR 2.203(A) provides:

In a pleading that states a claim against an opposing party, t he pleader must join every claim that the p leader has against that opposin g party at the time of serving the pleading , if it arises out of the transaction or occurrence that is the subject matter of the action and does not require for its adjud ication the presence of third parties over whom the court cannot acquire jurisdictio n. [Emphasis added.]

“The term ‘pleading’ is specifica lly and narrowly defined” by M CR 2.110 to include certain documents, including complaints. See Clohset v No Name Corp (On Remand) , 302 Mich App 550, 572; 840 NW2d 375 (2013). In determining whether two clai ms arise out of the same transaction or occurrence for purposes of MCR 2.203(A), res jud icata principles should be applied. See Marketplace of Rochester Hills Parcel B, LLC v Comerica Bank , 309 Mich App 579, 586; ___ NW2d ___ (2015) (cons truing MCR 2.203(A) using re s judicata principles), vacated in part on other grounds 871 NW2d 710 (2015); Pierson Sand & Gravel, Inc v Keeler

Brass Co , 460 Mich 372, 394 n 12; 596 NW2d 153 (1999) (T AYLOR , J., dissenting) (“MCR 2.203(A) requires, consistent with res judicata principles, a p arty to join every claim that the pleader has against th e opposing party.”).

As explained above, under Adam , plaintiff’s claims for PIP benefits in the original action, and his later claim for UM benefits in this action, were not pa rt of the same “transaction.” See
Adam , ___ Mich App ___; slip op at 3-6. Thus, because we are bound to follow Adam , we conclude that the claims did not arise out of the same transact ion or occurrence for purposes of MCR 2.203(A). See id . As such, compulsory joinder is not a viable alternative ground to affirm the trial court’s ruling. However, were we not bound to follow Adam , we would conclude that plaintiff failed to join his UM benefits claim in the original action at the time that the complaint in the original action was serv ed, which violates MCR 2.203(A). Plaintiff filed a complaint in the original action that pleaded a claim for PIP benefits, but did not include a claim for UM benefits. He later filed a complaint that included a claim for UM benefits and moved to have the
two cases consolidated. The tri al court denied plaintiff’s req uest. Thus, plaintiff failed to join the UM claim at the time of service of the complaint in the ori ginal action, which violates MCR 2.203(A). However, since we are compelled to follow Adam , we hold that plaintiff’s actions did not violate MCR 2.203(A).

For the reasons discussed above , we are compelled to reverse a nd remand for further proceedings consistent with this opinion because of this Court’ s decision in Adam . We do not retain jurisdiction.

/s/ Michael J. Riordan
/s/ Kathleen Jansen
/s/ Karen M. Fort Hood