Court Opinion

ID: 9754634
Source: CourtListenerOpinion
Date Created: 2023-08-28 20:08:31.191421+00
Date Added: 2024-06-11T07:27:56.096532
License: Public Domain

Underwood, J.,
dissenting. The majority completely ignores the plain meaning and intent of V.R.C.P. 13 (a) (3). Prior to the adoption of the Vermont Rules of Civil Procedure if the defendant as a part of his defense was relying upon an affirma*140tive claim arising out of the same incident and involving the same parties, it was compulsory that he file a counterclaim as a part of his answer to the plaintiff’s complaint, or his affirmative claim would thereafter be barred by res judicata or collateral estoppel. If, on the other hand, defendant as part of his defense desired to set forth an affirmative claim which arose from a different incident, he was not required to assert it as part of his answer to plaintiff’s complaint, for it was deemed a permissive counterclaim rather than a compulsory counterclaim. A permissive counterclaim was never barred by res judicata or collateral estoppel.
Upon enactment of V.R.C.P. 13 (a) (3), which is an addition to Federal Rule 13 and is based upon a comparable rule in Maine and Rhode Island, it no longer was necessary to file a compulsory counterclaim in tort actions where “the opposing party’s claim is for damage covered by a liability insurance policy.” Under such circumstances claims of a defendant whose defense will be managed by his liability insurer need not be filed as compulsory counterclaims. Instead defendant is free to obtain independent counsel to pursue independently his affirmative claims for damage.
Here the Berishas and Mr. Hardy each claimed to have a cause of action in tort against the other arising out of the same automobile accident. Mr. Hardy filed his cause of action first through his own independent attorney. The jury found Mr. Hardy to be 52% negligent and the Berishas 48% negligent and consequently brought in a general verdict for the Berishas, and under our comparative negligence law Mr. Hardy recovered nothing in his tort claim against the Berishas.
Although the claim of the Berishas against Mr. Hardy was filed only a few months following the filing of the claim of Mr. Hardy against the Berishas, the two cases were never consolidated or joined for trial pursuant to V.R.C.P. 42(a). Prior to the trial of the Berishas’ claim against Mr. Hardy, the Berishas moved for summary judgment on the issue of liability contending, under the doctrine of collateral estoppel, they were entitled to a summary judgment on the issue of negligence, as determined by the jury in the case of Mr. Hardy against the Berishas. In short, it was the Berishas’ position that liability was now fixed at 52% negligence on the part of Mr. Hardy and that Mr. Hardy’s attorney, hired by his insur*141anee carrier to conduct his defense, could not relitigate the issue of liability.
The majority on our Court agree with the position of the Berishas. They seem to recognize, however, that Mr. Hardy’s attorney, furnished to him by his insurer, had no duty under V.R.C.P. 13(a) (3) to file a compulsory counterclaim to the Berishas’ tort claim, but fault him for not filing a timely permissive counterclaim or seeking joinder or consolidation of the two cases. The insurer’s attorney, as was his right under V.R.C.P. 13(a) (3), elected not to file a permissive counterclaim but rather to defend Mr. Hardy on the issues of liability and damages, which he had every right to assume under the rule would be litigated de novo. It is optional with a defendant under V.R.C.P. 13(a) (3) whether to file a permissive counterclaim, but failure to do so does not render the prior judgment res judicata, or any ingredient of the prior judgment a matter for collateral estoppel.
Had the insurer’s attorney filed a permissive counterclaim it would have been a useless act as Mr. Hardy, with his own independent counsel and unbeknownst to his insurer, had already litigated his only affirmative claim to judgment.
One of the primary purposes of V.R.C.P. 13 (a) (3) is to protect the insurance carrier from one of its insured, who without notice to his insurer, proceeds to file and litigate his independent cause of action. Such was the case here. The insurance carrier had no opportunity to participate in the conduct of the first trial and by denying it an opportunity to litigate fully the issues of liability in the second trial, the majority has effectively deprived the insurer of its protection under the rule. Cf. 1 R. Field, V. McKusick & L. Wroth, Maine Civil Practice § 13, Reporter’s Notes at 263-64 (2d ed. 1970).
I would affirm the decision of the trial judge denying plaintiffs’ motion for summary judgment thereby permitting the case to proceed to trial on the issues of liability and damages. By so doing the rights and obligations of the insurer would be protected in the manner specified under the rule.