Present: All the Justices 

BILL GREEVER CORPORATION, ET AL. 

v. Record No. 972543 OPINION BY JUSTICE ELIZABETH B. LACY 

 September 18, 1998 

TAZEWELL NATIONAL BANK 

FROM THE CIRCUIT COURT OF TAZEWELL COUNTY 

Keary R. Williams, Judge 

In this action by a debtor against a former creditor, we 

consider whether a bankruptcy court's prior order confirming 

the debtor's reorganization plan containing a reservation of 

rights clause was a final disposition of all disputes between 

the debtor and the creditor. 

In 1992, Bill B. Greever, Sr., filed a petition for 

reorganization under Chapter 11 of the Bankruptcy Code in the 

United States Bankruptcy Court for the Western District of 

Virginia. Greever listed Tazewell National Bank (Tazewell) as 

a creditor. In Schedule B of his bankruptcy petition, Greever 

was required to list "contingent and unliquidated claims of 

every nature, including . . . counterclaims of the debtor." 

Greever responded "NONE." In his "Disclosure Statement 

Relating to Bill Greever and Plan of Reorganization" (the 

reorganization plan), however, Greever included the following 

reservation language 

nothing in this plan would waive any and all of the 

debtors [sic] rights to bring in [sic] action 

against any party or parties which the debtor 

believes may be indebted to the debtor for any 
causes of action that may exist pre-petition. The 

purpose of this Chapter 11 plan is not to settle or 

waive any of those causes of action but to preserve 

all of those if bringing the same is determined by 

the debtor to be necessary in the future. 

On December 10, 1992, the bankruptcy court entered an order 

confirming Greever's reorganization plan. Tazewell did not 

note any objections and did not appeal the confirmation order. 

 On April 24, 1994, Greever and the Bill Greever 

Corporation, wholly owned by Greever, (collectively "Greever") 

filed a motion for judgment against Tazewell in the Circuit 

Court for the County of Tazewell.1 Greever asserted tortious 

interference with business expectancy, breach of contract, and 

various other lender liability claims against Tazewell arising 

out of the parties' pre-bankruptcy relationship. Tazewell 

filed a motion for summary judgment, arguing, inter alia, that 

the bankruptcy confirmation order was a final disposition of 

all disputes between Greever and Tazewell, and the doctrine of 

res judicata, therefore, precluded Greever's claims.2 The 

trial court agreed and granted summary judgment in favor of 

Tazewell. Greever then filed a motion for reconsideration, 

 1

 Greever also asserted claims against another former 

creditor, Citizens Bank of Tazewell. Greever's claims against 

Citizens Bank were later severed from the instant cause of 

action and are not at issue in this appeal. 

2

 At the hearing on Tazewell's motion for summary 

judgment, Greever conceded that Bill Greever, Sr., and the 

Bill Greever Corporation are privies, and that if res judicata

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citing additional authority, which the trial court denied. We 

awarded Greever an appeal. 

I. 

We begin our consideration of this appeal by reviewing 

the doctrine of res judicata, the rule against claimsplitting, and the finality of bankruptcy orders. 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. Bates v. 

Devers, 214 Va. 667, 670, 202 S.E.2d 917, 920 (1974)(citations 

omitted). 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." Id.

at 670-71, 202 S.E.2d at 920-21. A claim which "could have 

been litigated" is one which "if tried separately, would 

constitute claim-splitting." Id. at 670 n.4, 202 S.E.2d at 

920 n.4. 

"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 

 

bars Bill Greever, Sr.'s, personal claims against Tazewell, it 

also bars the corporation's claims. 

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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. Id. at 291-92, 191 S.E. at 610. 

Applying the doctrine of res judicata enforces the rule 

against claim-splitting by barring further litigation of 

claims which "could have been litigated" between the parties 

in an earlier proceeding. The rule against claim-splitting is 

not absolute, however. A defendant may waive the rule by 

express or implied consent. Gary Steel Products Corp. v. 

Kitchin, 197 Va. 471, 474, 90 S.E.2d 120, 123 (1955). If this 

exception to the rule against claim-splitting is applicable, 

res judicata will not bar the subsequent suit. 

Federal courts which have considered the application of 

res judicata in the context of bankruptcy confirmation orders 

have not discussed "claim-splitting" as such, but have 

generally held that claims against creditors which could have 

been brought in a bankruptcy proceeding and which might have 

affected the parameters of the bankruptcy proceeding may not 

be litigated in a subsequent proceeding in another court. 

Eubanks v. Federal Deposit Ins. Corp., 977 F.2d 166, 170 (5

Cir. 1992); 

th

Sure-Snap Corp. v. State Street Bank and Trust 

4
Co., 948 F.2d 869, 870 (2 Cir. 1991). In seeking the 

protection of the bankruptcy court, the debtor is required to 

list all its assets and liabilities, including contingent and 

unliquidated claims "of every nature, including counterclaims 

of the debtor." 

nd

Id. at 873. This requirement is designed to 

allow creditors to take an informed position on the debtor's 

proposed reorganization plan. Thus, when the bankruptcy court 

enters an order confirming a proposed reorganization plan, 

that order disposes of all matters between the debtor and the 

creditors in the manner prescribed by the confirmed plan. See

In Re Grimm, 168 B.R. 102, 110-11 (Bankr. E.D. Va. 

1994)(bankruptcy confirmation order final judgment on the 

merits for res judicata purposes). Any attempt by the debtor 

to resurrect a claim against a creditor which could have been 

brought in a prior bankruptcy proceeding, therefore, is barred 

by the doctrine of res judicata. Eubanks, 977 F.2d at 174-75; 

Sure-Snap, 948 F.2d at 877.

On appeal, Greever does not dispute the general principle 

that the doctrine of res judicata is applicable to bankruptcy 

confirmation orders. Greever seeks to avoid its application, 

however, based on "exceptions" to the rule against claimsplitting contained in § 26 of the Restatement (Second) of 

Judgments (1982) (the Restatement). First, Greever argues 

that by failing to note an objection to the claim reservation 

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language confirmed by the bankruptcy court's order, Tazewell 

"acquiesced" to "claim-splitting," and cannot now assert the 

defense of res judicata. Second, Greever argues that by 

confirming a reorganization plan which contained claim 

reservation language, the bankruptcy court expressly preserved 

Greever's right to maintain later actions against creditors. 

Finally, Greever claims that application of res judicata to 

the instant case would defeat the public policies of 

"fairness, justice and judicial economy." We address these 

arguments in order. 

II. 

Greever first seeks to avoid the application of res

judicata by applying Subsection (1)(a) of § 26 of the 

Restatement, which states that the general rule prohibiting 

claim-splitting set out in § 24 of the Restatement does not 

apply when 

The parties have agreed in terms or in effect 

that the plaintiff may split his claim, or the 

defendant has acquiesced therein . . . . 

Greever argues that under this rule, res judicata should not 

be applied in this case because Tazewell acquiesced in 

Greever's splitting of his claims by failing to object to the 

reservation language in the reorganization plan. Thus, 

Greever concludes, he is entitled to proceed with the instant 

litigation and is not barred by res judicata. 

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Applying this subsection, other courts have uniformly 

held that a defendant can acquiesce to claim-splitting by 

failing to object to a reservation clause in a prior consent 

decree, settlement agreement, or confirmed bankruptcy 

reorganization plan. See e.g., Keith v. Aldridge, 900 F.2d 

736, 740-42 (4th Cir. 1990); Medina v. Wood River Pipeline Co., 

809 F.2d 531, 533-34 (8th Cir. 1987); Terrebonne Fuel & Lube v. 

Placid Refining Co., 666 So.2d 624, 632-34 (La. 1996). These 

decisions generally require, however, that the reservation 

language expressly preserve specific claims or that the facts 

and circumstances clearly show that the parties intended to 

preserve specific claims for later adjudication. Keith, 900 

F.2d at 740-42; Medina, 809 F.2d at 533-34; Shelar v. Shelar, 

910 F. Supp. 1307, 1313 n.4 (N.D. Ohio 1995); Terrebonne, 666 

So.2d at 634-36. See also Kelly v. Merrill Lynch, Pierce, 

Fenner & Smith, Inc., 985 F.2d 1067, 1069-70 (11th Cir. 1993). 

 We have not adopted § 26(1)(a) of the Restatement. 

However, the decisions based on this subsection are 

instructive because they interpret "acquiescence" under the 

Restatement in a manner similar to our standard for waiving 

the rule against claim-splitting. Gary Steel, 197 Va. at 474, 

90 S.E.2d at 123. 

The requirements for finding "acquiescence" reflect the 

general principle that waiver requires both knowledge of the 

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facts basic to exercise of the right waived and an intent to 

waive the right. Employers Commercial Union Ins. Co. of 

America v. Great American Ins. Co., 214 Va. 410, 412-13, 200 

S.E.2d 560, 562 (1973); May v. Martin, 205 Va. 397, 404, 137 

S.E.2d 860, 865 (1964). Therefore, we agree that a defendant 

may waive the claim-splitting rule by failing to object to 

reservation language if the reservation clause clearly 

expresses the parties' intent to preserve specific claims or 

if the circumstances of the case make it clear that the 

defendant was aware that additional claims could be asserted 

against him later. 

 Here, the language used by Greever in his reorganization 

plan's reservation clause was generic and did not identify any 

specific creditors or claims. Nevertheless, Greever, relying 

on Terrebonne, asserts that the claim reservation language was 

sufficiently explicit to put Tazewell and the bankruptcy court 

"on notice of Mr. Greever's intent to reserve causes of action 

which he might have, presumably to be asserted at a later 

date."

 In Terrebonne, the claim reservation language in a 

debtor's reorganization plan was similar to the language 

Greever included in his plan. 666 So.2d at 627. After the 

plan was confirmed, the debtor filed a state court breach of 

contract claim against one of its former creditors. Id. at 

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628. The Supreme Court of Louisiana held that by failing to 

appeal the confirmation of the reorganization plan, the 

creditor had "acquiesc[ed] [to] the reservation of claims." 

Id. at 634. Greever argues, therefore, that Tazewell's 

failure to object to similar claim reservation language here 

can constitute a waiver of the rule against claim-splitting. 

In Terrebonne, however, the Supreme Court of Louisiana 

relied on facts and circumstances in addition to the 

reservation language in concluding that the creditor had 

acquiesced to claim-splitting. During the Terrebonne

bankruptcy proceeding, the debtor attempted to raise its 

breach of contract claim against the creditor. The bankruptcy 

court declined to exercise jurisdiction over the breach of 

contract claim and directed the debtor to bring the claim in 

state court. Id. at 627-28. The Supreme Court of Louisiana 

concluded that under these circumstances, the parties "were 

aware" that the specific claims at issue would be asserted 

later. Id. at 634. 

The facts in this case differ significantly from those 

underlying the holding in Terrebonne. Here, Greever did not 

attempt to raise any claims against Tazewell in the bankruptcy 

proceeding. Greever acknowledged that he "never disclosed to 

the bankruptcy court or to his creditors the nature or 

existence of any of the specific claims asserted" in the 

9
instant litigation. Furthermore, Greever represented in 

Schedule B of his bankruptcy petition that he did not have any 

additional claims or counterclaims against his creditors. The 

trial court specifically found that Tazewell "had no knowledge 

of any claims or potential claims against them by [Greever] at 

the time the confirmed plan was approved." These facts do not 

show either that the reservation language expressly preserved 

specific claims or that the parties intended to preserve 

specific claims for later adjudication. Accordingly, there is 

no basis to conclude that Tazewell "acquiesced in" or waived 

the rule against claim-splitting by express or implied 

consent. 

III. 

 Greever, relying on Subsection (1)(b) of § 26 of the 

Restatement, next asserts that the trial court erred in 

failing to hold that the bankruptcy court "expressly reserved" 

Greever's right to maintain later actions against creditors 

when it confirmed the reorganization plan containing the 

reservation clause. That subsection of the Restatement 

provides that the rule against claim-splitting does not apply 

if "[t]he court in the first action has expressly reserved the 

plaintiff's right to maintain the second action." Restatement 

(Second) of Judgments § 26(1)(b)(1982). 

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Unlike the provisions of Subsection (1)(a) of the 

Restatement rule, there is no Virginia counterpart for 

Subsection (1)(b). Rather, we have held that the rule against 

claim-splitting "exists for the benefit and protection of the 

defendant." Gary Steel, 197 Va. at 474, 90 S.E.2d at 122. 

Thus, the right to waive the rule has been limited to the 

defendant.

Assuming without deciding that an exception to the rule 

against claim-splitting can occur by virtue of court action, 

we cannot say that the bankruptcy court's action confirming 

the reservation of claims clause in Greever's reorganization 

plan was in any way an "express" preservation of those claims. 

The bankruptcy court in this case merely confirmed a plan 

containing generic claim reservation language which did not 

identify any specific claims or any specific creditors. It 

would be inconsistent to conclude that, although the 

reservation clause was insufficiently explicit to charge 

Tazewell with "knowledge" of Greever's claims for the purpose 

of waiving the rule against claim-splitting, the language was 

sufficiently clear to constitute an "express" preservation of 

Greever's claims by the bankruptcy court. In addition, as the 

trial court noted, the confirmed reorganization plan also 

contained language preserving the bankruptcy court's 

jurisdiction over any disputes "regarding the interpretation 

11
of any provision(s) of the Plan," or any "cause(s) of action 

. . . referenced . . . in this plan." Therefore, there is 

nothing in this record that would support a conclusion that 

the bankruptcy court "expressly" preserved Greever's right to 

file a subsequent state court action against Tazewell.

IV. 

 Greever's final argument is that applying res judicata in 

the instant case defeats "the public policies of fairness, 

justice and judicial economy," citing Subsection (1)(e) of 

§ 26 of the Restatement.3 Like this subsection of the 

Restatement, Virginia recognizes that applying the doctrine of 

res judicata may not be appropriate when it conflicts with 

more important public policies. Bates, 214 Va. at 670 n.2, 

202 S.E.2d at 920 n.2. The facts of this case, however, do 

not justify overriding the doctrine of res judicata on this 

basis. 

The purpose of the res judicata doctrine, as we have 

noted, is to establish certainty in legal relations, to demand 

 3

 Subsection (1)(e) provides that the general rule 

prohibiting claim splitting set out in § 24 does not apply 

when 

[f]or reasons of substantive policy in a case 

involving a continuing or recurrent wrong, the 

plaintiff is given an option to sue once for the 

total harm, both past and prospective, or to sue 

from time to time for the damages incurred to the 

date of suit, and chooses the latter course. 

Restatement (Second) of Judgments § 26(1)(e)(1982). 

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an end to litigation, and to prevent the harassment of 

parties. Bates, 214 Va. at 670, 202 S.E.2d at 920. In a 

bankruptcy proceeding, there is an especially strong interest 

in finality. Sure-Snap, 948 F.2d at 877. One seeking 

bankruptcy protection has a duty to schedule, for the benefit 

of creditors, all his interests and property rights. Oneida 

Motor Freight, Inc. v. United Jersey Bank, 848 F.2d 414, 416 

(3 Cir. 1988). In the instant case, Greever failed to 

disclose his claims against Tazewell either as required by 

Schedule B of his bankruptcy petition or otherwise, thereby 

representing to the bankruptcy court and to Tazewell that he 

had no counterclaims against Tazewell. 

rd

The principles underlying the doctrine of res judicata

are fully implicated in this case. We see no reason why 

"fairness, justice and judicial economy" should preclude 

application of the doctrine to Greever's cause of action. 

 For the above reasons, we affirm the trial court's 

conclusion that Greever's lender liability claims against 

Tazewell are barred by the doctrine of res judicata. 

Affirmed.

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