Opinion ID: 1936419
Heading Depth: 1
Heading Rank: 4

Heading: Failure to File Counterclaim in Prior Litigation.

Text: Bergantzel claims that even if the in pari delicto doctrine does not preclude recovery, Mlynarik cannot maintain this action because the claim he asserts was a compulsory counterclaim in the first lawsuit between these parties. Bergantzel contends that as a consequence of Mlynarik's failure to assert his claim there, he is barred from asserting it here. Upon our consideration of this issue, we conclude there is no merit to Bergantzel's defense. Iowa Rule of Civil Procedure 29 provides: A pleading must contain a counterclaim for every claim then matured, and not the subject of a pending action, held by the pleader against any opposing party and arising out of the transaction or occurrence that is the basis of such opposing party's claim, unless its adjudication would require the presence of indispensable parties of whom jurisdiction cannot be acquired. A final judgment on the merits shall bar such a counterclaim, although not pleaded. Iowa R. Civ. P. 29 (now renumbered as Iowa Rule of Civil Procedure 1.241). Also highly relevant to the issue before us is Iowa Code section 631.7(4), which states in relevant part: The rules of civil procedure pertaining to actions, joinder of actions, parties and intervention shall apply to small claims actions, except that rule 29 shall not apply. No counterclaim is necessary to assert an offset arising out of the subject matter of the plaintiff's claim. A counterclaim ... against an existing party is deemed denied and no responsive pleading by such party is required. Iowa Code § 631.7(4) (2001) (emphasis added). The prior action between these parties was commenced as a small claims action by Bergantzel. Bergantzel, 619 N.W.2d at 310. Consequently, rule 29 (now rule 1.241) does not apply, including the provision that an unasserted compulsory counterclaim is barred by a final judgment on the merits. Harris v. Jones, 476 N.W.2d 54, 54 (Iowa 1991) (holding rule that compulsory counterclaim is barred by final judgment in first action does not apply to small claims actions, and allowing such a claim to be asserted in a later lawsuit).