Eastern Marine Const. Corp. v. First Southern Leasing, Ltd., 86-168

• Decision Date: 03 April 1987
• Docket Number: No. 86-168,86-168
• Citation: 525 A.2d 709,129 N.H. 270
• Parties: EASTERN MARINE CONSTRUCTION CORPORATION v. FIRST SOUTHERN LEASING, LTD.
• Court: New Hampshire Supreme Court

Page 709

525 A.2d 709

129 N.H. 270

EASTERN MARINE CONSTRUCTION CORPORATION v. FIRST SOUTHERN LEASING, LTD.

No. 86-168.

Supreme Court of New Hampshire.

April 3, 1987.

Follender, Connors & Wacks, Nashua (Richard C. Follender on the brief and orally), for plaintiff.

McLane, Graf, Raulerson & Middleton, Manchester (James R. Muirhead & a. on the brief and orally), for defendant.

JOHNSON, Justice.

This is an appeal brought by plaintiff Eastern Marine Construction Corporation (Eastern Marine) from the dismissal of its action for damages and attorneys' fees and costs against the defendant First Southern Leasing, Ltd. (First Southern). The complaint alleged interference with contractual relations, negligence, wrongful attachment and abuse of process in connection with the issuance of certain notices of mechanics liens by the defendant. The Trial Court (Goode, J.) ruled that because the facts and issues involved in the suit had been litigated in an earlier proceeding between the parties, Eastern Marine's suit was barred under the doctrines of res judicata and collateral estoppel. The court further held that the plaintiff's claim for wrongful attachment failed to state a cause of action. We affirm.

The plaintiff is a construction company engaged as a contractor in several construction projects in New Hampshire. It employed North American Rental, Inc., (North American) as a subcontractor to perform site preparation on these projects. In performing its work, North American used equipment leased from the defendant, First Southern, which is a North Carolina corporation engaged in the business of leasing all types of equipment, including heavy construction equipment.

Between December 5, 1984, and May 15, 1985, First Southern entered into eleven leases with North American, under which it leased to North American eleven pieces of heavy construction equipment. Beginning in late spring 1985, and continuing into the summer of 1985, North American fell behind in making its lease payments to First Southern. By August 8, 1985, North American had defaulted on all eleven leases, and owed First Southern $41,446.20 in unpaid lease obligations. Accordingly, on August 8, 1985, First Southern exercised its rights under the leases to terminate the leases and take possession of the equipment.

In a preliminary effort to secure payment of the $41,446.20 debt, First Southern gave notice to the owners of each of the three projects on which North American was working, pursuant to RSA 447:1 through RSA 447:12-a, that it intended to claim a mechanic's lien on "the real estate comprising each of the projects ... and the structures and buildings thereon and the improvements and appurtenances thereto," for the amounts due it from North American.

On August 21, 1985, the plaintiff brought an equity action in the superior court, alleging that the notices of mechanic's lien and account were "improper, illegal and defective," and asked for an award of attorneys' fees and for "such further relief as this court deems just and fair."

On August 27, 1985, the court issued a preliminary order "dissolving" the notices of mechanic's lien "without prejudice to reinstate those liens pending a hearing on the merits at the request of First Southern Leasing, Ltd." First Southern made such a request, and on November 1 the court reaffirmed its earlier order, after which First Southern withdrew each of the notices of mechanic's lien. Thus, the defendant's "push" never became a "shove;" no real estate was ever attached, and no writ of attachment was ever issued, served or recorded in the registry of deeds.

On November 13, 1985, Eastern Marine filed a motion for attorneys' fees and costs, which alleged that the defendant had acted in an oppressive, vexatious, arbitrary, unjust and obstinate manner in asserting its liens. This motion was denied, the court finding that First Southern acted in good faith and did not issue the three notices of mechanics lien to harass, delay or with frivolity. First Southern having complied with the court's order dissolving the liens, the court dismissed the suit on December 24, 1985.

Eastern Marine brought a second suit against First Southern on February 4, 1986, again seeking attorneys' fees, but adding requests for damages. In this suit, the plaintiff alleged interference with contractual relations, negligence, wrongful attachment, and abuse of process. All of these claims derived from First Southern's issuance of the notices of mechanic's liens. First Southern responded with a special plea of bar. After a hearing, the court ruled that the plaintiff's second suit was barred under the doctrines of res judicata and collateral estoppel. The court further held that the wrongful attachment claim failed to state a cause of action. The defendant's appeal raises the following question for our review: whether the doctrine of res judicata bars actions at law for interference with contractual relations, negligence, wrongful attachment, and abuse of process where these claims are based upon the same transaction involved in a previous suit between the parties.

"Spurred by considerations of judicial economy and a policy of certainty and finality in our legal system, the doctrines of res judicata and collateral estoppel have been established to avoid repetitive litigation so that at some point litigation over a particular controversy must come to an end." Bricker v. Crane, 118 N.H. 249, 252, 387 A.2d 321, 323 (1978) (citing University of New Hampshire v. April, 115 N.H. 576, 578, 347 A.2d 446, 449 (1975); Restatement (Second) of Judgments ch. 3 § 48, Comment a (Tent.Draft No. 1, 1973)). The essence of the doctrine of res judicata is that "a final judgment by a court of competent jurisdiction is conclusive upon the parties in a subsequent litigation involving the same cause of action." Id. 118 N.H. at 252-53, 387 A.2d at 323 (quoting Concrete Constructors, Inc. v. The Manchester Bank, 117 N.H. 670, 672, 377 A.2d 612, 614 (1977)).

In Bricker, this court held that res judicata was not applicable where the second suit was brought under a new theory of relief. Instead, the court applied collateral estoppel, or "issue preclusion," noting:

"The plaintiff's present action for the tortious interference with a contractual relation proceeds upon a different cause of action from his former claim that the decision not to reappoint him was arbitrary, capricious and unreasonable.... The defendants must therefore rely on collateral estoppel, and our inquiry must be directed to the prior suit to determine whether the question now raised was directly in issue and actually tried."

Bricker, supra, 118 N.H. at 253, 387 A.2d at 323-24 (citations omitted).

Thus a crucial question in determining whether to apply res judicata or collateral estoppel is always whether the action brought in the second suit constitutes a different cause of action than that alleged in the first suit. In the instant case, Eastern Marine sought equitable relief to remedy irreparable harm in its first action and to compensate it for attorneys' fees and costs. In the second, it raised four actions at law, based upon wrongful interference with contractual relations, negligence, wrongful attachment and abuse of process. Whether the plaintiff is barred from raising these theories in its second suit under the doctrine of res judicata depends upon our approach to the question of what constitutes a "cause of action" for res judicata purposes. In this case, we choose to expressly follow what we consider to be the modern and better view, and hold that the term "cause of action" means the right to recover, regardless of the theory of recovery. A theory of recovery therefore must be pleaded, or be subject to bar. See Restatement (Second) of Judgments ch. 3 §§ 24, 25 (1980). We therefore reject the view that the term is synonymous with the particular legal theory in which a party's claim for relief is framed. To the extent that Bricker v. Crane is inconsistent with the modern view, it is disapproved.

The narrow approach to "cause of action" as connotative of a single pristine legal theory harkens back to the ancient strictures of common law pleading, where the whole aim was to frame one single issue. See discussion in Williamson v. Columbia Gas & Electric Corp., 186 F.2d 464, 469 (3d Cir.1950), cert. denied, 341 U.S. 921, 71 S.Ct. 743, 95 L.Ed. 1355 (1951). Under this guiding principle of the elaborate writ system "the phrase 'cause of action' came to have a very narrow meaning. If the theory in the second suit was unavailable under the writ used in the first suit, the plaintiff had no opportunity to litigate it there and so plaintiff was not barred by res judicata." Id. Such a narrow view of res judicata, however, is not in keeping with the principle that pervades our modern procedure. The central policy "exemplified by the free permissive joinder of claims, liberal amendment provisions, and compulsory counterclaims, is...