Opinion ID: 470297
Heading Depth: 3
Heading Rank: 2

Heading: Entire Controversy Doctrine

Text: 16 New Jersey has adopted a broad policy against claim-splitting--the entire controversy doctrine--that is closely related to principles of res judicata. Gareeb v. Weinstein, 161 N.J.Super. 1, 390 A.2d 706, 710 (App.Div.1978); see Comment, The Entire Controversy Doctrine: A Novel Approach to Judicial Efficiency, 12 Seton Hall L.Rev. 260, 265 (1982). The district court relied on this doctrine as well as on issue preclusion in dismissing plaintiffs' complaint. It concluded that plaintiffs' pre-contract misrepresentation claims were barred because they had not been brought with the breach of contract claim that was part of the same controversy. 17 The entire controversy doctrine requires that a person assert in one action all related claims against a particular adversary or be precluded from bringing a second action based on the omitted claims against that party. Aetna Insurance Co. v. Gilchrist Brothers, Inc., 85 N.J. 550, 428 A.2d 1254 (1981). This reflects New Jersey's view that the entire controversy, rather than its constituent causes of action, is the unit of litigation. A plaintiff must seek complete vindication of the wrong he charged. Malaker Corp. Stockholders Protective Committee v. First Jersey National Bank, 163 N.J.Super. 463, 395 A.2d 222, 238 (App.Div.1978), certif. denied 79 N.J. 488, 401 A.2d 243 (1979). 18 The entire controversy doctrine reaches more broadly than the same cause of action requirement of traditional res judicata doctrine. It is similar to the transaction-based doctrine of claim preclusion described by the Restatement (Second) of Judgments Sec. 24 (1982). 2 See Gareeb, 390 A.2d at 710; Comment, supra, 12 Seton Hall L.Rev. at 274 n. 117, 288. In determining the dimensions of a single controversy, a court must utilize litigation efficiency as its guide: 19 [If] the litigants in the action as framed will, after final judgment therein is entered, be likely to have to engage in additional litigation in order to conclusively dispose of their respective bundles of rights and liabilities which derive from a single transaction or related series of transactions, then the omitted component must be regarded as constituting an element of the minimum mandatory unit of litigation. That result must obtain whether or not the component constitutes either an independent cause of action by technical common-law definition or an independent claim which, in the abstract, is separately adjudicable. 20 William Blanchard Co. v. Beach Concrete Co., 150 N.J.Super. 277, 293-94, 375 A.2d 675, 683-84 (App.Div.) certif. denied 75 N.J. 528, 384 A.2d 507 (1977); Malaker, 395 A.2d at 239. See Tevis v. Tevis, 79 N.J. 422, 400 A.2d 1189 (1979) (Suit for assault and battery barred after prior suit for divorce on grounds, inter alia, of physical abuse); Ajamian v. Schlanger, 14 N.J. 483, 103 A.2d 9, cert. denied 348 U.S. 835, 75 S.Ct. 58, 99 L.Ed. 659 (1954) (Suit for damages barred after suit for contract rescision based on some fraudulent representations); cf. Alper Construction Co. v. Garavelli, 655 S.W.2d 132 (Mo.Ct.App.1983) (Suit for fraudulent inducement of contract barred following suit for quantum meruit). 21 Given this approach to claim preclusion, we can confidently predict that New Jersey would view the first count of plaintiffs' complaint in this action as but another aspect of the same controversy that had been at issue in the first lawsuit. The controversy at issue in both suits involves Exporting's alleged failure to post the security which it promised to provide in connection with a single commodities transaction. The entire controversy doctrine therefore bars a second action against the defendant in the first suit--Exporting. 3 It does not necessarily follow, however, that the district court properly dismissed count one against the individual defendants who were not named in the first action, Corradetti, Coppersmith, and Bernstein. 22 In Crispin v. Volkswagonwerk, A.G., 96 N.J. 336, 476 A.2d 250 (1984), the Supreme Court of New Jersey held that the entire controversy doctrine can bar a claim asserted against one who was not a party to the prior related proceeding. 4 It acknowledged, however, that this conclusion was inconsistent with a consistent and venerable line of New Jersey cases. As a result, the Supreme Court explicitly directed that the Crispin holding be applied only prospectively. Conversely, it decreed that with respect to controversies arising before the decision in Crispin, the entire controversy doctrine would not preclude a related claim against one not a party to the original proceeding. 476 A.2d at 254. 23 Because the plaintiffs' cause of action arose in 1980, long before Crispin, their suit is governed by the rule which prevailed before that decision. Accordingly, the applicable rule is that a claim against a person who was not a party to the initial litigation is ordinarily not precluded from being subsequently litigated even if it is the same as or transactionally related to the claim which is the subject of the initial litigation. Bates Marketing Associates, Inc., v. Lloyd's Electronics, Inc., 190 N.J.Super. 502, 464 A.2d 1142, 1144 (App.Div.), certif. granted 94 N.J. 583, 468 A.2d 222 (1983) (citations omitted); Gilchrist, supra; see, Comment, supra, 12 Seton Hall L.Rev. at 279-82. Therefore, 24 [If a] plaintiff has been successful in the first action and the judgment in his favor therein remains unsatisfied, he is free to proceed against the other party whose responsibility to him for the harm presents a fact issue not foreclosed by reason of a prior adverse adjudication. 25 McFadden v. Turner, 159 N.J.Super. 360, 388 A.2d 244, 246 (1978.) 5 26 In particular, the recovery of a judgment, not satisfied, against the agent or servant does not bar a separate suit against the principal or master. Moss v. Jones, 93 N.J.Super. 179, 225 A.2d 369, 372 (App.Div.1966). We are confident that New Jersey, in a pre-Crispin case, would apply the same principle when the first suit is against the principal and the second against its agents. Accordingly, the entire controversy doctrine, while constituting a bar to this second action against Exporting, does not prevent plaintiffs from seeking relief from Exporting's agents or principals. See Gilchrist, supra, (prior to Crispin, entire controversy doctrine not applicable when first suit was against employer for vicarious liability and second suit is against employee); Gareeb v. Weinstein, 161 N.J.Super. 1, 390 A.2d 706 (1978) (pre-Crispin doctrine does not apply to principal and agent). 27 Accordingly, we hold that the district court erred in dismissing the count one claims against Corradetti, Coppersmith, and Bernstein.