Opinion ID: 791097
Heading Depth: 2
Heading Rank: 2

Heading: Daley II

Text: 17 We now turn to the issue of whether the doctrine of res judicata bars Daley II. We review de novo a dismissal based on res judicata grounds. Lundquist v. Rice Mem'l Hosp., 238 F.3d 975, 976 (8th Cir.2001) (per curiam). Under the doctrine of res judicata, a judgment on the merits in a prior suit bars a second suit involving the same parties or their privies based on the same cause of action. Landscape Properties, Inc. v. Whisenhunt, 127 F.3d 678, 682 (8th Cir.1997) (quoting Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 n. 5, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979)) (internal quotation omitted). Daley argues that res judicata dismissal of Daley II was improper because the claims asserted in Daley II are much broader than those in Daley I, and Marriott was not a defendant in Daley I. We reject both arguments and affirm the district court's dismissal of Daley II.
18 For purposes of res judicata, the term cause of action has been given a more practical construction than the rather rigid and technical construction it was given at common law. Ruple v. City of Vermillion, 714 F.2d 860, 861 (8th Cir. 1983). 14 Therefore, under the same cause of action element of the doctrine of res judicata, whether a second lawsuit is precluded turns on whether its claims arise out of the `same nucleus of operative facts as the prior claim.' Costner v. URS Consultants, Inc., 153 F.3d 667, 673 (8th Cir. 1998) (quoting United States v. Gurley, 43 F.3d 1188, 1195 (8th Cir.1994)). Thus we have said that `[i]n the final analysis the test would seem to be whether the wrong for which redress is sought is the same in both actions.' Roach v. Teamsters Local Union No. 688, 595 F.2d 446, 449 (8th Cir.1979) (quoting Woodbury v. Porter, 158 F.2d 194, 195 (8th Cir. 1946)). 19 Daley argues that her additional allegations in Daley II -subsequent mental-health benefit denials under the Plan since the filing of Daley I and untimely notices of those denials-are new causes of action which should not be barred by res judicata. We reject this argument because it improperly relies on a rigid and technical view of the term cause of action. Taking a more practical view, the two additional allegations in Daley II are part of the same nucleus of operative facts as Daley I: the Nebraska mental-health parity law, the plan-year limit on outpatient mental-health visits under the Plan, and the Plan's denial of Daley's claims for mental-health benefits in excess of the plan-year limit. Regardless of the number of claim denials and whether Daley received timely notice of those denials, the wrong for which she seeks redress-the denial of her claims based on the plan-year limit-is the same in both Daley I and Daley II. Therefore, we conclude that Daley II is based on the same cause of action as Daley I.
20 Although we conclude that Daley I and Daley II are based on the same cause of action, the doctrine of res judicata will not bar Daley II against a defendant which was not a party to Daley I. Marriott, the only named defendant in Daley II, was not a party to the Daley I lawsuit in which the Plan and Empire were the named defendants. An exception exists, however, when a defendant stands in privity with a defendant in the prior suit. Headley v. Bacon, 828 F.2d 1272, 1275 (8th Cir.1987). 21 Daley argues that the doctrine of res judicata does not bar Daley II against Marriott because Marriott, a non-party to Daley I, does not stand in privity with Empire. Daley does not address the issue of whether Marriott, the Plan administrator, is in privity with the Plan. She misses the point that in order for her argument to succeed, Marriott must not be in privity with either defendant in Daley I. Daley's argument fails, therefore, because we conclude that Marriott stands in privity with the Plan. 22 Marriott and the Plan are in privity because they have a close relationship, bordering on near identity. Gurley, 43 F.3d at 1197 (quoting Headley, 828 F.2d at 1276) (internal quotations omitted). We focus not on the nature of their relationship in general, but on the identity of their interests in Daley I. Headley, 828 F.2d at 1277; see Ruple, 714 F.2d at 862. 23 In Daley I, Marriott's interests as the administrator of the Plan were identical to the Plan's interests. The Plan provides that the Plan administrator is responsible for all discretionary matters arising in the interpretation, operation, and administration of the Plan. In addition, the Plan's summary plan description designates Marriott's General Counsel as the agent for service of legal process and states that only the Plan administrator or its officially designated representatives are authorized to speak for the Plan. Therefore, in Daley I, Marriott, in its capacity as the Plan administrator, was the entity concerned with ensuring that Plan benefits be provided in accordance with the terms of the Plan. In fact, had Daley somehow prevailed in Daley I, Marriott, the Plan administrator, would have been obligated to disburse benefits under the Plan accordingly. Therefore, we conclude that the Plan and Marriott are in privity for purposes of res judicata. 24 Accordingly, because Daley II involves the same parties or their privies and is based on the same cause of action as Daley I, we affirm the district court's dismissal of Daley II on res judicata grounds.