Duhaime v. American Reserve Life Ins. Co.

• Decision Date: 01 July 1986
• Docket Number: No. 12808,12808
• Court: Connecticut Supreme Court
• Parties: Omer DUHAIME v. AMERICAN RESERVE LIFE INSURANCE COMPANY.

Page 333

511 A.2d 333

200 Conn. 360

Omer DUHAIME v. AMERICAN RESERVE LIFE INSURANCE COMPANY.

No. 12808.

Supreme Court of Connecticut.

Argued April 29, 1986.

Decided July 1, 1986.

Ronald E. Cassidento, with whom, on the brief, was Eric Carlson, Law Student Intern, for appellant (plaintiff).

Sharon S. Tisher, with whom was Kim M. Cooke, for appellee (defendant).

Before PETERS, C.J., and ARTHUR H. HEALEY, DANNEHY, SANTANIELLO and CALLAHAN, JJ.

PETERS, Chief Justice.

The dispositive issue in this case is whether a litigant, after a final judgment on the merits of his contractual claim against an insurance company, is barred, by the principles of res judicata, from thereafter pursuing a second cause of action against the same insurance company under the Connecticut Unfair Trade Practices Act (CUTPA). ¹ In the present cause of action, the plaintiff, Omer Duhaime, alleged that the defendant, American Reserve Life Insurance Company, had violated CUTPA by its wrongful refusal to pay the plaintiff moneys to which he was entitled under a disability insurance policy issued by the defendant. In the trial court, the defendant successfully moved for summary judgment on the ground of res judicata, and the plaintiff has appealed from this judgment. We find no error.

The facts are undisputed. On March 14, 1978, the plaintiff obtained a disability insurance certificate from the defendant for indemnity payments in the event that the insured became totally disabled. The insurance policy had a clause excluding coverage for a preexisting disability. A few days prior to the issuance of the policy, the plaintiff had stopped working because of a chronic respiratory ailment. He became totally disabled as a result of an accidental fall on September 22, 1978.

The defendant denied payment of the plaintiff's claim under the insurance policy. The defendant maintained that it was not obligated to indemnify the plaintiff under its disability policy because the defendant had already become totally disabled, by virtue of his respiratory ailment, prior to the effective date of his insurance coverage.

In the plaintiff's first cause of action, he sued the defendant for wrongful denial of insurance benefits in breach of the terms of the insurance contract. That case, which was tried to the court, Barall, J., resulted in a judgment on the merits for the plaintiff, the trial court therein having determined that the plaintiff was not totally disabled until he injured his back when he fell on September 22, 1978. The trial court awarded the plaintiff $2380.28, which the defendant paid.

In the plaintiff's second cause of action, he sued the defendant under CUTPA, alleging that the defendant's refusal to honor its obligations under its disability insurance policy was wholly "without good faith or valid defense" and hence an unfair trade practice in violation of General Statutes § 42-110b. ² This cause of action had precisely the same factual predicate as did the first cause of action. In response to questioning at a deposition taken to investigate the basis for the second cause of action, the plaintiff consistently reverted to the fact of the defendant's erroneous reliance on the insurance policy's preexisting disability clause. He proffered no other factual allegations to support his claims that the defendant's conduct manifested lack of good faith, absence of a valid defense, or fraud. In his opposition to the defendant's motion for summary judgment on the CUTPA cause of action, the plaintiff relied on the unsupported assertion that "it would have been inappropriate for [the] plaintiff to bring the present CUTPA action as part of the earlier litigation on the contract." In contravention to the requirements of Practice Book § 380, ³ the plaintiff submitted no affidavits, documents or exhibits to support his objection to the defendant's motion.

The trial court, M. Hennessey, J., concluded that the defendant was entitled to summary judgment because of res judicata. The court held that the plaintiff's CUTPA claim arose out of the same facts litigated in the plaintiff's first action, and that the CUTPA claim might appropriately have been joined with the plaintiff's previously litigated claim for breach of contract. Accordingly, the court ruled that the plaintiff's present action was barred and that the defendant's motion for summary judgment should be granted. We agree.

Our rules of res judicata are based on the public policy that "a party should not be allowed to relitigate a matter which it already has had an opportunity to litigate." In re Juvenile Appeal (83-DE), 190 Conn. 310, 318, 460 A.2d 1277 (1983); Corey v. Avco-Lycoming Division, 163 Conn. 309, 316-17, 307 A.2d 155 (1972), cert. denied, 409 U.S. 1116, 93 S.Ct. 903, 34 L.Ed.2d 699 (1973). "[T]he purpose of a law suit is not only to do substantial justice but to bring an end to controversy." James & Hazard, Civil Procedure (3d Ed.1985) § 11.2, p. 590.

The principles that govern res judicata are described in Restatement (Second), Judgments (1982). The basic rule is that of § 18, which states in relevant part: "When a valid and final personal judgment is rendered in favor of the plaintiff: (1) [t]he plaintiff cannot thereafter maintain an action on the original claim or any part thereof, although he may be able to maintain an action upon the judgment...." As comment (a) to § 18 explains, "[w]hen the plaintiff recovers a valid and final personal judgment, his original claim is extinguished and rights upon the judgment are substituted for it. The plaintiff's original claim is said to be 'merged' in the judgment." Our recent case law has uniformly approved and applied the principle of claim preclusion or merger. See Gagne v. Norton, 189 Conn. 29, 32, 453 A,2d 1162 (1983); Corey v. Avco-Lycoming Division, supra, 163 Conn. 317, 307 A.2d 155.

Because the operative effect of the principle of claim preclusion or merger is to preclude relitigation of the "original claim," it is crucial to define the dimensions of that "original claim." The Restatement (Second), Judgments provides, in § 24, that "the claim [that is] extinguished includes all rights of the plaintiff to remedies against the defendant with respect to all or any part of the transaction, or series of connected transactions, out of which the action arose. What factual grouping constitutes a 'transaction', and what groupings constitute a 'series', are to be determined pragmatically, giving weight to such considerations as whether the facts are related in time, space, origin, or motivation, whether they form a convenient trial unit, and whether their treatment as a unit conforms to the parties' expectations or business understanding or usage." In amplification of this definition of "original claim," § 25 of the Restatement (Second) states that "[t]he rule of § 24 applies to extinguish a claim by the plaintiff against the defendant even though the plaintiff is prepared in the second action (1) [t]o present evidence or grounds or theories of the case not presented in the first action, or (2) [t]o seek remedies or forms of relief not demanded in the first action."

The transactional test of the Restatement provides a standard by which to measure the preclusive effect of a prior judgment, which we have held to include "any claims relating to the cause of action which were actually made or might have been made." Corey v. Avco-Lycoming Division, supra, 317, 307 A.2d 155; Gagne v. Norton, supra, 189 Conn. 32, 453 A.2d 1162. In determining the nature of a cause of action for these purposes, we have long looked to the "group of facts which is claimed to have brought about an unlawful injury to the plaintiff"; Bridgeport Hydraulic Co. v. Pearson, 139 Conn. 186, 197, 91 A.2d 778 (1952); and have noted that "[e]ven though a single group of facts may give rise to rights for several different kinds of relief, it is still a single cause of action." Id.

Application of a transactional test requires the conclusion that the plaintiff's CUTPA...