The fact that a party declines to appear does not prevent the default judgment from being set up as res judicata against it, barring subsequent counterclaims. Fed. R. Civ. P. 13(a) insures against the undesirable possibility whereby a party having a claim which would be the subject of a compulsory counterclaim could avoid stating it as such by bringing an independent action in another court after the commencement of the federal action.
Several lawyers filed a complaint against its client for the payment of unpaid legal fees due. The court granted a default judgment against one defendant, a former client. That same former client responded to the complaint and then brought a separate suit against the lawyers, alleging legal malpractice. The lawyers moved for a declaratory judgment because a legal malpractice claim against them was a compulsory counterclaim under Fed. R. Civ. P. 13(a) and should not have been filed in a separate suit.
Was the defendant barred from filing a separate suit against the lawyers?
The court entered a declaratory judgment in favor of the lawyers and against the client, holding that the legal malpractice claim was a compulsory counterclaim in the suit for fees, so that the claim was forever barred under Fed. R. Civ. P. 13(a) from being raised in the malpractice case or in any other legal action because final judgment on this matter was entered against the client and in favor of the lawyers. The purpose of the rule was to prevent multiplicity of actions and to achieve resolution in a single lawsuit of all disputes arising out of common matters. As the factual claims in the two actions indicated that evidence offered in both actions was likely to be substantially identical, the claim should have been adjudicated in a single forum.