Opinion ID: 542860
Heading Depth: 3
Heading Rank: 1

Heading: The Res Judicata and Collateral Estoppel Defenses

Text: 27 The doctrine of res judicata, or claim preclusion, generally prevents the litigation of any claim or ground of recovery that was available to a party in a prior action, whether or not the prior judgment actually determined that claim or ground. See, e.g., Balderman v. United States Veterans Administration, 870 F.2d 57, 62 (2d Cir.1989); Teltronics Services, Inc. v. L M Ericsson Telecommunications, Inc., 642 F.2d 31, 35 (2d Cir.), cert. denied, 450 U.S. 978, 101 S.Ct. 1511, 67 L.Ed.2d 813 (1981). The fact that both suits involved 'essentially the same course of wrongful conduct' is not decisive. Lawlor v. National Screen Service Corp., 349 U.S. 322, 327, 75 S.Ct. 865, 868, 99 L.Ed. 1122 (1955). Whether or not the first judgment will have preclusive effect depends in part on whether the same transaction or connected series of transactions is at issue, whether the same evidence is needed to support both claims, and whether the facts essential to the second were present in the first. N.L.R.B. v. United Technologies Corp., 706 F.2d 1254, 1260 (2d Cir.1983). 28 While a previous judgment may preclude litigation of claims that arose prior to its entry, it cannot be given the effect of extinguishing claims which did not even then exist and which could not possibly have been sued upon in the previous case. Lawlor v. National Screen Service Corp., 349 U.S. at 328, 75 S.Ct. at 868. Thus, when the parties have entered into a contract to be performed over a period of time and one party has sued for a breach, res judicata will preclude the party's subsequent suit for any claim of breach that had occurred prior to the first suit; it will not, however, bar a subsequent suit for any breach that had not occurred when the first suit was brought. See tenBraak v. Waffle Shops, Inc., 542 F.2d 919, 924 n. 6 (4th Cir.1976) (dictum) (an action for rent not due at the commencement of a former action for rent is not barred by the former judgment); Klein v. John Hancock Mutual Life Ins. Co., 683 F.2d 358, 360 (11th Cir.1982) (judgment based on long-term continuing contract, which is subject to intermittent breach during its term, does not automatically bar a later suit for a second, identical breach); Balderman v. United States Veterans Administration, 870 F.2d at 62 (employee's claim for employment termination in violation of tenure rights not barred by judgment entered in earlier action brought prior to that termination). See generally 18 C. Wright, A. Miller & E. Cooper, Federal Practice and Procedure Sec. 4409, at 74 (1981) ([t]he dimensions of the creditor's claim or cause of action fluctuate with the balance in the account--whenever suit is brought it must include the entire balance then due); id. at 75 (Under a single five year lease providing for sixty monthly installments of rent, for example, a suit could be brought for each unpaid installment as it fell due; a single suit, however, must include all unpaid installments due when it is filed.). 29 In the present case, Steinegger sought recovery in its rent counterclaim only for underpayments from 1981 forward. Plainly, this counterclaim was not available to Steinegger in 1976 when Prime I was commenced (nor even in mid-1981 when it was decided). Accordingly, the district court properly ruled that the rent counterclaim was not barred by res judicata. 30 Nor was Steinegger's rent counterclaim barred by the doctrine of collateral estoppel, or issue preclusion. That doctrine prevents the parties' relitigation of an issue that was (a) raised, (b) litigated, and (c) actually decided by a judgment in their prior proceeding, regardless of whether the two suits are based on the same cause of action. See, e.g., Lawlor v. National Screen Service Corp., 349 U.S. at 326, 75 S.Ct. at 867; Balderman v. United States Veterans Administration, 870 F.2d at 62. 31 Though Prime contends that [t]he accounting claim raised in [Prime I ] put into issue the methodology Prime used to calculate room revenues, this defense founders on the second and third elements of issue preclusion. While it might be argued that the issue of Prime's methodology in calculating the percentage rents was raised by Steinegger's request in Prime I for an accounting, it does not appear that the issue of methodology was actually litigated, and it is clear that it was not actually decided. With respect to the percentage rents issue, the Prime I court ruled only that the 1973 amendment to the lease did not relieve Prime of the obligation to pay rent on the agreed percentage basis; beyond quoting the percentage provision of the lease, that court did nothing more than order Prime to pay to the defendants those monies. The Prime I court did not order an accounting and did not express any view on the methodology issue. 32 Accordingly, there is no merit in Prime's suggestion that principles of collateral estoppel barred Steinegger's present rent counterclaim.