Opinion ID: 3162344
Heading Depth: 2
Heading Rank: 1

Heading: Res Judicata and Estoppel by Deed

Text: The plaintiffs first claim that it was error for the hearing justice to apply the doctrine of res judicata to its claim for ownership over the common elements and to its claims that the original and FAR declarations are invalid. They argue that none of the requirements of res judicata have been met because the issues are not identical to those litigated in America I and America II, they did not arise out of the same transaction, the parties are not identical, and no final judgment has been entered. We disagree. “The doctrine of res judicata bars the relitigation of all issues that ‘were tried or might have been tried’ in an earlier action.” Torrado Architects v. Rhode Island Department of Human Services, 102 A.3d 655, 658 (R.I. 2014) (quoting Huntley v. State, 63 A.3d 526, 531 (R.I. 2013)). “The doctrine serves as a bar to a second cause of action where there exists: (1) ‘identity of parties’; (2) ‘identity of issues’; and (3) ‘finality of judgment in an earlier action.’” Id. (quoting Huntley, 63 A.3d at 531). “The principle underlying the rule of [res judicata]    is that a party who once has had a chance to litigate a claim before an appropriate tribunal usually ought not to have another chance to do so.” Id. at 659 (quoting Huntley, 63 A.3d at 532). First, plaintiffs argue the absence of an identity of parties because while IDC and Roos were parties to the litigation in America I and America II, in those cases they were parties in their capacities as “successor declarants” and a board member, respectively, and here, they are with our well-settled raise-or-waive rule, these arguments are deemed to be waived. See, e.g., Warwick Housing Authority v. McLeod, 913 A.2d 1033, 1037 (R.I. 2007). -8- bringing suit as unit owners. 2 Although creative, this argument is nevertheless faulty. “Determining whether there is ‘identity of parties’ requires resolving ‘whether the parties to this second action are identical to or in privity with the parties involved in the [prior action].’’’ Reynolds v. First NLC Financial Services, LLC, 81 A.3d 1111, 1115 (R.I. 2014) (quoting E.W. Audet & Sons, Inc. v. Fireman’s Fund Insurance Co. of Newark, New Jersey, 635 A.2d 1181, 1186 (R.I. 1994)). “A party to an action has been defined as ‘[a] person who is named as a party to an action and subjected to the jurisdiction of the court   .’” Id. (citing E.W. Audet & Sons, Inc., 635 A.2d at 1186-87)). IDC and Roos were both named parties in America I and America II, and there is no question that they were subject to this Court’s jurisdiction. The plaintiffs simply cannot avoid the fact that they were both parties to the prior litigation by asserting that they now represent different interests. Next, the issue of ownership over the common elements within the GIS Condominium was clearly litigated in America I, 844 A.2d at 131-33, and was the primary focus of our clarified decision in America II, 870 A.2d at 443, where we said that title to the common elements had always been with individual unit owners, subject to any development rights. Furthermore, even though the validity of the original and FAR declarations was not directly litigated in America I and America II, plaintiffs’ claims are still barred because we have adopted the transactional approach to the “identity of issues” component. See Torrado Architects, 102 A.3d at 658. That approach “provides that a claim that is extinguished by a final judgment ‘includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose.’” Id. (citing Restatement (Second) Judgments § 24(1) at 196 (1982)). Here, the original and FAR declarations clearly 2 Roos owns one condominium unit in Capella. IDC owns two condominium units in Capella and one unit in Harbor Houses. -9- arose from the same transaction between the parties that was the focus of America I and America II, i.e., the GIS Condominium. The plaintiffs should have raised any issues with the original and FAR declarations then, and we recognized that neither had been challenged at that time. See America I, 844 A.2d at 120 n.4 (noting that neither the original nor the first amended declaration had been challenged). Last, contrary to plaintiffs’ assertion, there was a valid final judgment. On May 27, 2005, the Superior Court entered a separate and final judgment pursuant to Rule 54(b) of the Superior Court Rules of Civil Procedure 3 following America I and America II. While there may still be issues lingering in the America litigation (which, if any, are not pertinent to this appeal), there has at least been a final judgment entered following our decisions in America I and America II, which is all that is relevant to our res judicata analysis today. Any claims of ownership that plaintiffs had to the common elements of the GIS Condominium, as well as their grievances with the original and FAR declarations, should have been raised in the prior litigation. As a result, plaintiffs cannot assert those claims now. We also agree with the hearing justice that plaintiffs’ first two claims are alternatively barred by the doctrine of estoppel by deed. “Generally, the doctrine of estoppel by deed provides that equity will not permit a grantor, or one in privity with him or her, to assert anything in derogation of an instrument concerning an interest in real or personal property as against the grantee or his or her successors.” 28 Am. Jur. 2d Estoppel and Waiver § 5 at 469 (2011). In 3 Rule 54(b) of the Superior Court Rules of Civil Procedure provides, in relevant part, that: “When more than one (1) claim for relief is presented in an action, whether as a claim, counterclaim, cross-claim, or third party claim, or when multiple parties are involved, the court may direct the entry of final judgment as to one (1) or more but fewer than all of the claims or parties only upon an express determination that there is no just reason for delay and upon an express direction for the entry of judgment.” -10- short “[a]n estoppel may be said to arise when a person executes some deed, or is concerned in or does some act, either of record or in pais, which will preclude him from averring anything to the contrary.” Burke v. Barnum & Bailey, 40 R.I. 71, 77, 99 A. 1027, 1029 (1917) (quoting 10 Ruling Case Law, 675). Here, plaintiffs and their predecessors in interest (i.e., IDC, Inc. and Globe) marketed and sold condominium units under both the original and FAR declarations, and warranted good title to the common elements to which they now claim ownership. Consequently, under the doctrine of estoppel by deed, they may not now proclaim that these declarations, which governed the units that they sold, are invalid. The hearing justice stated it best: “[p]laintiffs may not execute and deliver warranty deeds to purchasers of an interest in a condominium development, only to assert some 20 years later that the condominium structure never existed.” For the same reason, they cannot now claim ownership of the common elements or seek to invalidate the original declaration or the FAR. Thus, plaintiffs’ first two claims are barred under the doctrine of estoppel by deed as well.