Court Opinion

ID: 7958527
Source: CourtListenerOpinion
Date Created: 2022-09-09 00:25:21.862599+00
Date Added: 2024-06-11T16:34:20.998490
License: Public Domain

D. E. Holbrook, P.J.
The facts of the instant case are set out in detail in our Brother Judge *397Marutiak’s dissent. Briefly, plaintiff filed suit in municipal court for the City of Troy on June 1, 1976, alleging that he was entitled to compensation for accrued vacation time unused at the time of his involuntary termination by defendant. Plaintiff appeared in propria persona in the municipal court action; defendant was represented by counsel. On September 7, 1976, a judgment of no cause of action was rendered against plaintiff. The reasons underlying the municipal court’s action in ruling against plaintiff do not appear of record although apparently the decision was made upon the merits of plaintiff’s claim.
Plaintiff filed a second suit in Oakland County Circuit Court on February 9, 1977, alleging an oral contract of employment with defendant and violation of that contract by the defendant’s discharge of plaintiff from his position as accountant. Defendant moved for accelerated judgment under GCR 1963, 116.1(5), alleging merger under Michigan’s compulsory joinder rule as set forth in GCR 1963, 203.1.
At a July 27, 1977, hearing, the trial court granted defendant’s motion and held:
"It’s an old principle of law that to avoid multiplicity of law suits that if there is a law suit growing out of a situation it may not be parceled out and if a person decides they are going to appear in pro per to handle a case they are governed by the same rules of law. * * * I think this motion is well taken and it should be granted and it is granted.”
As the dissent notes, determination of this case depends entirely upon interpretation of GCR 1963, 203.1. That rule provides as follows:
"A complaint shall state as a claim every claim *398either legal or equitable which at the time of serving the pleading the pleader has against any opposing party, if it arises out of the transaction or occurrence that is the subject-matter of the action and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. Failure by motion or at the pretrial conference to object to improper joinder of claims or to a failure to join claims required to be joined constitutes a waiver of the required joinder rules and the judgment shall not merge more than the claims actually litigated.” (Emphasis supplied.)
The first sentence of the above-quoted paragraph is a strict requirement of compulsory joinder of all related claims. The final sentence, however, substantially abrogates this compulsory joinder rule by providing for waiver in those instances where failure to join is not objected to in the first action.
According to 1 Honigman & Hawkins, Michigan Court Rules Annotated (2d ed), Committee Notes, pp 472-473:
"The strictness of the compulsory joinder provision of sub-rule 203.1 and its all inclusive character is mitigated in a sensible way by its last sentence * * *. The harshness of the present practice as it relates to the enforcement of compulsory joinder provisions (this is sometimes referred to as the rule against splitting causes of actions) is the fact it almost always is enforced after the fact, through the doctrine of merger or res judicata. In other words, at the present time the question of whether or not all of a cause of action has been sued upon is seldom, if ever, challenged in the original suit when the defect might have been corrected. Normally, the challenge comes in a response to another suit alleging splitting or merger. At this late stage of the proceedings, no matter how innocent the parties were, there is no way to correct the matter and the party loses his chance to litigate the rest of his claim.
*399"This is a broad rule of required joinder and it is predicated on the theory of requiring the parties to settle all matters arising out of the transaction or occurrence in one lawsuit. It also provides, however, a sensible method of deciding what matters do arise out of the transaction or occurrence in the first litigation and if the parties (the plaintiff by suing on less than all; the defendant by not raising the question) desire to litigate their claims in two pieces, the harshness of the merger doctrine should not prejudice them. In other words, the scope of the action that will be merged will be determined in the ñrst litigation when it can be corrected rather than in the second litigation when it cannot be corrected. Nothing in this rule changes the application of the doctrine of collateral estoppel.” (Emphasis supplied.)
Plaintiff claims on appeal that his first action in municipal court merely alleged improper denial of vacation benefits. Although no record was maintained in that proceeding, plaintiff’s counsel offers to file affidavits to that effect. From plaintiff’s complaint in the municipal court proceeding it does not appear that allegations of improper termination or violation of the parties’ oral contract were raised or litigated. For this reason plaintiff contends that the instant matter is not barred by GCR 1963, 203.1 and that defendant is precluded from objecting to plaintiff’s failure to join his two separate claims in the original action.
Two panels of this Court have interpreted GCR 1963, 203.1 on previous occasions. In Purification Systems, Inc v The Mastan Co, Inc, 40 Mich App 308; 198 NW2d 807 (1972), lv den 388 Mich 751 (1972), the appellate Court determined that theirs was a question of public policy and that the court was required to weigh the prevention of "vexatious” and "costly” litigation against the "harshness” of the traditional compulsory joinder rule. In *400the instant case, the trial court relied upon similar reasoning in support of its decision.
The Mastan Court, applying this policy approach, held that where a contract claim asserted by the plaintiff arises out of one transaction or occurrence and the cause proceeds to final adjudication against the party, his later assertion of a claim under implied contract or quantum meruit is barred by the rule of res judicata. It should be noted, however, that in Mastan the party was seeking to recover the same loss under two separate theories of recovery.
An earlier panel of the Court of Appeals, with Judge V. J. Brennan, who sat on Mastan also, writing for the majority, considered this court rule in Mango v Plymouth Twp Board of Trustees, 33 Mich App 715; 190 NW2d 285 (1971). In Mango, plaintiffs were challenging a zoning ordinance. Plaintiffs’ first suit raised two counts: that the ordinance was arbitrary and unreasonable as applied and therefore unconstitutional; and second, that, in the event the ordinance was found to be constitutional, a writ of mandamus should issue to compel the defendant to allow plaintiffs to make substantial repairs to their property while continuing their nonconforming use. The plaintiffs abandoned the second count, however, at the pretrial conference. After their challenge on the basis of count I was denied, plaintiffs brought a second action, raising the claim formerly dropped as count II. The trial court granted defendant’s motion for accelerated judgment in this second action on the basis of res judicata. The appellate Court reversed.
The appellate Court noted that facts and circumstances were not identical in the two actions, and, therefore, res judicata could not bar the subse*401quent action. Furthermore, the Court felt that since they had failed to object to the abandonment of the second count in the first action, the defendants had waived any right they may have had to invoke the compulsory joinder rule bar to the second action. Judge Brennan did not find these two opinions to be inconsistent, and we believe the Mango decision to be more clearly on point.
We find the interpretation of GCR 1963, 203.1 adopted by the dissent in the instant case to be unnecessarily harsh; the plaintiff is not claiming identical damages under two separate theories of recovery as in Mastan, supra. Clearly, if the first sentence of rule 203.1 stood alone, the dissent’s interpretation would be correct. Nevertheless, we hold that the second sentence of court rule 203.1 was intended to eliminate this harshness in cases such as the present. To require joinder of all employment-related claims is an expansive measure; to require this joinder without allowing the parties, through silence, to waive its compulsory effect, as provided in the latter sentence of rule 203.1, is also productive of cumbersome and unwieldly litigation. The interpretation of this court rule as adopted by the Mango Court is preferable and more clearly reflects the intent of the rule.
Both of the plaintiff’s actions arose out of the same subject-matter, only if we consider "subject-matter” very broadly; it is not clear that the separate actions are so inherently closely related that the latter claim should be waived if not joined in the original action. From the fact of plaintiff’s original complaint in municipal court, wrongful termination does not arise as an issue. The second action, on the other hand, alleges as its primary and pivotal factual consideration the improper termination of an oral employment agreement. To *402require compulsory joinder in a case such as the instant case would completely read the second section of GCR 1963, 203.1 out of that court rule.
Defendant should not be made to suffer for plaintiff’s decision to proceed in municipal court without counsel, nevertheless, having enjoyed the assistance of counsel in the original proceeding, defendant is the more likely party to have knowingly waived his rights and duties under GCR 1963, 203.1. We hold that plaintiff must have an opportunity to reach the merits of his claim of improper termination of employment in accord with the second sentence of rule 203.1. Defendant’s motion for accelerated judgment in the trial court should have been denied and we find under court rule 203.1 and the Mango decision that the defendant had waived its objections to plaintiff’s failure to join all causes of action in the original litigation.
The decision of the trial court is reversed and remanded for trial. Costs to plaintiff.