The bar arising out of Fed. R. Civ. P. 13(a) is characterized variously. Some courts hold that a judgment is res judicata of whatever could have been pleaded in a compulsory counterclaim. Other courts view the rule not in terms of res judicata, but as creating an estoppel or waiver.
Plaintiff Dindo alleges that defendant Whitney was a passenger in a car belonging to Whitney, but driven by Dindo; that the car went off the road, severely injuring Dindo; and that the cause of the accident was Whitney's putting his hand through the steering wheel in reaching for a flashlight on the steering shaft. Defendant sued plaintiff and defendant's own insurer paid defendant a sum within policy limits. Two years later, plaintiff sued defendant alleging that the accident was caused by defendant. Plaintiff alleged he didn't realize he had a claim against defendant until he spoke with new counsel. The trial court granted defendant's motion to dismiss. On appeal, defendant argued that plaintiff's action was barred by reason of plaintiff having failed to assert it as a compulsory counterclaim in the prior action.
In a lawsuit that ended in settlement, does the failure to raise a counterclaim bar a party from using that same claim in a new action?
It is clear on the record that before insurance company counsel settled the case they conferred with Dindo on a number of occasions, and apparently saw no defense to the suit. All that was said is not entirely clear. The court made findings of fact which may have been the most reasonable resolution, but which went beyond permissible bounds on a motion for summary judgment. It was proper for it to find that Dindo did not request counsel to file a counterclaim against Whitney, and that there had been time to do so, but we must accept Dindo's position that he did not realize, until he spoke with new counsel in September 1968, that he had a basis for so doing, namely, Whitney's conduct in reaching for the flashlight. Dindo, assertedly, had thought that because he was driving the car he could have no claim.
If Dindo, clearly having opportunity to assert it, knew of the existence of a right to counterclaim, the fact that there was no final judgment on the merits should be immaterial, and a Rule 13(a) bar would be appropriate. His conscious inaction not only created the very additional litigation the rule was designed to prevent, it exposed the insurer to double liability. However, the court is not persuaded that a final judgment is a sine qua non to invocation of the bar; there is nothing in the rule limiting the term "judgment."