Porn v. Nat'l Grange Mut. Ins. Co.

93 F.3d 31 (1st Cir. 1996)

 

RULE:

Under the federal law of res judicata, a final judgment on the merits of an action precludes the parties from relitigating claims that were raised or could have been raised in that action. For a claim to be precluded, the following elements must be established: (1) a final judgment on the merits in an earlier action: (2) sufficient identity between the causes of action asserted in the earlier and later suits: and (3) sufficient identity between the parties in the two suits.

FACTS:

An insured successfully sued his insurer for breach of contract for refusing to pay his claim for underinsured motorist benefits incurred during a car accident. Subsequently, the insured brought a diversity action against the insurer, alleging its conduct in handling the claim constituted breach of the covenant of good faith, intentional infliction of emotional distress, negligent infliction of emotional distress, and violations of the Connecticut Unfair Insurance Practices Act and the Connecticut Unfair Trade Practices Act. The district court granted summary judgment in favor of the insurer based on the doctrines of collateral estoppel and res judicata. On appeal the insured argued that the judgment in the first action did not preclude his bad-faith, emotional distress, and statutory unfair practices claims; and the equitable exception demanded suspension of res judicata in his case.

ISSUE:

Do two lawsuits based on the same set of fact require dismissal based on res judicata where additional causes and damages are asserted?

ANSWER:

Yes

CONCLUSION:

The court affirmed, holding that the bad-faith claims were barred by claim preclusion because the two lawsuits involved sufficiently identical causes of action and the equitable exception did not apply because requiring the bad-faith claim to be brought in the first action created no unusual hardship.

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